NEW YORK (AP) — J.C. Penney’s newly tapped CEO has a big challenge ahead of him: The troubled chain is showing signs of improvement after racking up billions in losses, but still hasn’t figured out how to get shoppers back into its department stores.
Penney said Monday that Marvin Ellison, a 30-year retail veteran and executive vice president of stores at Home Depot, will become its CEO next August. Ellison will be the first black CEO in the company’s 112-year history.
Ellison succeeds Mike Ullman, a former Penney CEO who came out of retirement last year to take the helm again. His mission was to stabilize the business following the ouster of Ron Johnson, a former Apple executive who tried unsuccessfully to reinvent the beleaguered chain by getting rid of sales and some basic merchandise. That led to billions in losses of profit and sales.
The company’s profit losses — which have amounted to a total of $3.16 billion in 11 of the last 12 quarters — have slowed significantly under Ullman’s leadership. But the company is still in the red, and analysts say Ellison’s challenge will be to fix the fundamental problems that caused Penney to lose customers in the first place.
They say the retailer doesn’t have merchandise that sets it apart from rivals like Macy’s and H&M. Its stores are drab and unexciting. And its web site doesn’t offer the selection and services that shoppers like.
“While bringing in a credible new CEO has some benefits, J.C. Penney’s customers are leaving the store,” said Michael Binetti, an analyst at UBS in a note to clients Monday.