In the great race between JCPenney and Sears of which retailer will be the world’s slowest melting icecube, and who will file Chapter 11 (or 7) first, today the former took a decisive lead when JC Penney’s CEO Marvin Ellison unexpectedly announced he is leaving the near-insolvent department store operator to join home improvement retailer Lowe’s.
The shocking announcement came less than 3 years after Ellison took the top job at JC Penney, following an activist attempt by Bill Ackman to “fix” JCPenney ended in disaster.
The announcement was so unexpected it appears to thave surprised even the board of directors which said it had elected current Lead Independent Director Ronald W. Tysoe as Chairman of the Board and instead of a replacement CEO, it has created an Office of the CEO, which will be comprised of Chief Financial Officer Jeff Davis, Chief Customer Officer Joe McFarland, Chief Information Officer and Chief Digital Officer Therace Risch and Executive Vice President of Supply Chain Mike Robbins.
In short, the rats are leaving the sinking ship and are not even bothering to tell the other rats.
As the FT notes, Ellison is “leaving behind a company that is struggling to turn around an ongoing sales slump that has been exacerbated by the rise of e-commerce and changing consumer shopping habits.”
What he is also doing is assuring that all those who put JCP ahead of Sears on their deadpool will win.
JC Penney said Ellison would stay on until June 1. Ellison’s departure came just days after JC Penney issued another disappointing set of first quarter results and cut its profit outlook for the year.
“I want to thank Marvin for his many significant contributions to JCPenney over the past three years,” said chairman Ronald Tysoe.
“During his tenure, the Company retired $1.4 billion in debt, renewed and enhanced its revolving credit facility and has significantly strengthened the Company’s financial position. “Additionally, he assembled a strong leadership team that will continue to serve the Company in an elevated capacity to ensure the entire organization remains focused on our customer and improving results. We thank Marvin for his leadership and dedication, and wish him much success in his next endeavor.”
The stock plunged as much as 10% in the premarket, plunging to a new all time low. No pun intended, but Lowe’s rose over 3.0%.