J.C. Penney Eliminates Chief Merchant Role

J.C. Penney announced last week that it has eliminated the position of chief merchant. The move was made to streamline decision making and promote greater agility within its merchandise buying teams. John Tighe, current chief merchant, will be leaving the company to pursue other opportunities and will not be replaced. All senior merchandising executives will report directly to Marvin Ellison, chairman and CEO, effective immediately.

"Today's executive realignment reflects a growing need to ensure our company remains nimble and flexible amid the constant change and transformation in the retail environment," said Ellison, in a press release. "This simplified structure offers greater flexibility, which is critical to ensuring our assortment remains fresh and relevant, and compels more shoppers to choose J.C. Penney."

Total Retail's Take: J.C. Penney's decision to eliminate the chief merchant position, once one of the most powerful jobs in retail,  demonstrates the industry's turmoil. Many experts believe that the ability of industry leaders to spot trends in advance, which catapulted many retail executives to the role of CEO, has become increasingly irrelevant. Fashion and merchandise, experts say, no longer bring shoppers to stores; instead what drives them is an evolving mix of service, selection and price. Therefore, the merchandise role isn't as important as it once was. What's more, store buyers, i.e., merchandisers, are no longer needed to spot or drive trends a year in advance as they once could. Fast fashion has trained shoppers to see fads by the week, not the season.

For J.C. Penney, this announcement comes as it begins to pivot its focus away from apparel and more towards other types of merchandise, like appliances. The department store chain saw its shares drop to an all-time low last month, when it slashed 2017 profit and comparable-sales forecasts because it had to cut the prices of unsold women's apparel. However, J.C. Penney still makes a significant amount of its sales from apparel. Last year, nearly a quarter of its sales came from women's apparel, according to reports. Combined with men's apparel and accessories, it accounted for nearly half. It will be very interesting to watch whether other companies will be following suit when it comes to their chief merchants.