JC Penney President Leaves Company
Department store chain J.C. Penney (NYSE: JCP) said Tuesday that its President, Michael Francis, is leaving the company.
Francis was formerly a Target (NYSE: TGT) executive, and J.C. Penney brought him in to help redefine the brand. However, the company is apparently unhappy with the results.
In a brief statement, J.C. Penney gave no clear reason for Francis' departure, but as he was responsible for a new pricing plan that abandoned hundreds of sales events, and as the company's numbers haven't improved, it would seem that Francis has now paid the price.
"We thank Michael for his hard work at J.C. Penney and wish him the best in his future endeavors," said CEO Ron Johnson, a former Apple (NASDAQ: AAPL) executive who came on board in November. That sentence was all that Johnson said.
The news has come as a surprise to many analysts, some of whom are referring to Francis as a fall guy. But when Johnson made the move from Apple (NASDAQ: AAPL) to J.C. Penney, (a career choice that was a surprise to many), he came in determined to reverse the company's fortunes, and he certainly has not been afraid to act fast and make big decisions.
J.C. Penney has been alarmed by a recent sharp drop in customer counts and plummeting sales, and much of this is being put down to customers being turned off by Johnson's strategy as they are used to coupons and the comforting feeling of big sales.
In May, J.C. Penney announced disappointing first-quarter results, and it attempted to save the year by better explaining the new pricing strategy, making it clear that it now has everyday low prices that are 40% lower than they were in 2011, month-long sales that are deeper and are on select items, and clearance sales events or "Best Price Friday" sales.
However, no matter how clear the company makes it or how often it spells it out, the new strategy is not working, pointing to the fact that customers prefer a classic sale where they at least feel as if they are getting better value. With that in mind, something had to change and the company obviously decided that Johnson's time was up.
On Tuesday morning, J.C. Penney is trading at about $24.30, down roughly 2.2%.
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