JC Penney Shares Plunge After CEO Ellison Departs For Lowe's
MOORESVILLE, N.C. (CBSDFW.COM/AP) — J.C. Penney CEO Marvin Ellison, a former Home Depot executive, is leaving the department store chain after less than four years to become the top executive at Lowe's.
The announcement Tuesday, just days after the company reported a first-quarter, but stronger than predicted revenue, sent its shares down more than 3 percent.
Ellison, one of only a few African-American CEOs at a Fortune 500 company, will succeed Robert Niblock at Lowe's on July 2. Lowe's has struggled to keep pace with rival Home Depot in a solid housing market, and Niblock had previously announced plans to retire.
Ellison took the top job at J.C. Penney in late 2014. He has attempted to refocus the company on home appliances and beauty, following a shift by consumers away from spending a lot of money on clothing.
He did make some inroads, but the turnaround is far from complete. With consumer spending on the rise, J.C. Penney was among the few retailers that failed to show a clear benefit in the most recent quarter. Instead, the department store slashed its profit expectations for the year.
"Ellison's exit will raise speculation that he is not particularly optimistic about the future prospects of (Penney) and sees the grass as being greener at Lowe's," wrote Neil Saunders, managing director of GlobalData Retail in a note. "Indeed, exiting before his plan is complete is a tacit admission that he may not be able to deliver what investors are looking for."
Ellison had previously spent 12 years at The Home Depot Inc.
J.C. Penney said Tuesday that it has created an "office of the CEO," staffed by the chief financial officer and three other top executives. The four will share equal responsibility for day-to-day operations until a new CEO is named.
Ronald Tysoe, an independent director on the board, was named as chairman.
(© Copyright 2018 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)