J.C. Penney Gains After Chain Names Its First Female CEO
(Bloomberg) -- Jill Soltau represents a milestone in J.C. Penney Co.’s 116-year history as the first woman named chief executive officer. She has her work cut out for her.
Shares of the struggling department-store chain climbed as much as 9 percent Wednesday, the most in more than seven months, on optimism about Soltau, who served as CEO of Joann Stores since 2015. She assumes the leadership of J.C. Penney on Oct. 15 with 30 years of experience in the retail industry, including stints at Kohl’s and Shopko.
Soltau’s predecessor, Marvin Ellison, who abruptly stepped down in May to become CEO of Lowe’s Cos., tried to revive the chain by improving the online experience, adding big-ticket items such as appliances and signing brand partnerships with celebrities. In the end, none of them made much difference and the company had to cut prices to reduce inventory.
“J.C. Penney is not an easy ship to turn,” said Poonam Goyal, an analyst at Bloomberg Intelligence. Apparel is key, and time will tell if Soltau can revive that division on her own with the current team or if she will bring in a new people with more apparel experience, she said.
The shares rose as high as $1.70, the biggest intraday gain since February. They had lost half their value this year through Tuesday’s close.
Soltau will enter the job with a target annual compensation of $11 million, consisting of a salary, bonus and a long-term incentive. This year she’ll also get a $6 million signing bonus and shares worth $10 million that vest over three years.
In August, J.C. Penney posted comparable-store sales for the second quarter that were close to flat and forecast a much wider loss for the current year. The results prompted one analyst to label the shares as “worthless,” while another suggested the chain was in “no man’s land.”
Gabriella Santaniello, founder of retail consulting firm A Line Partners, called Soltau “a smart choice” for the helm because of her background in apparel and accessories.
“These are categories that have long been suffering at J.C. Penney,” she said. It “seems to bring hope to investors that the company finally has someone in place who understands the ever changing world of fashion at a mass retailer.”
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