Alongside his Chief Executive‘s roles, Marvin Ellison will also take up the chairmanship of J C Penney Company Inc (NYSE:JCP). Penny’s board has appointed the 51-year-old CEO to succeed the longtime executive Mike Ullman whose retirement is just around the corner. Speaking about the changes, Ullman who has held Penny’s leadership from 2004 to 2011 before returning in 2013 expressed satisfaction with the board’s consideration of picking on Ellison.
The exiting CEO outlined his confidence in the appointee citing his proven ability in being able to make J.C. Penney a modern retailer business. Ellison’s appointment is in line with outlined succession plan that was unveiled in 2014 when Ellison, who was by then working for Home Depot Inc, was coming in as the CEO of the department store.
What may not be known about J.C. Penney
For a while now Penney has been facing tight competition from other online operators the likes of Amazon.com, Inc. (NASDAQ:AMZN). A lot of consumers especially those of younger generation have lost interest in the department store which purports to be of operating on a new business model. Its reputation is under siege.
It is in 2000 that Penney’s sales began to grind down while not being able to make a quick comeback from the Great Recession. The shrinking of its margins occasioned the hiring of Ron Johnson and in 2012, things started showing up after a through transformation. Johnson was later fired for failing to meet the sales targets and Ullman was rehired.
Shortly after, Penney was in chaos which resulted in a $5 billion long-term debt which was pegged on Johnson’s dismissal of the store’s core shoppers; the middle-income suburban moms.
Will Marvin Ellison meet the board’s expectations?
Yes. There is a lot of optimism in him. Many that have worked with him feel that he is worth the new roles given that within his CEO roles, he has been able to keep Penney on track. Besides, he has a keen interest in Penney’s e-commerce business and over the past one year; he has overseen Penney’s significant progress in implementing the changes needed to rebuild the store.
Ellison has a clear vision of where J.C. Penney should be. He feels that there is still space for making it a smarter and more efficient mid-market department store. Apparently, there is already so much to show including the 3.9% increase in comparable sales during the 2015 holidays.
It may not have reported any profit since 2010, but there is optimism of obtaining $1.2 billion in Ebitda for fiscal 2017. Appreciating the appointment, Ellison has expressed his loyalty and commitment to work with the board and the management team to drive the resurgence of JC Penney to the next level of performance.