This is not the end that JCPenney had in mind for Soltau when it was brought in October 2018 – at least not anytime soon. Few expected JCPenney to avoid bankruptcy entirely with its huge pile of debt maturing in the coming years. But the pandemic pushed JCPenney to the limit much faster than anyone could have imagined.
On January 1, Stanley Shashoua, chief investment officer at Simon Property Group, will become interim CEO for JCPenney, the company’s fourth in six years.
When Soltau took over JCPenney, the store was a mess. Previous CEO Marvin Ellison had introduced appliances to the store to get former Sears customers to venture into the mall to JCPenney, from one failed department store to another soon. The play failed, Ellison left for Lowe’s and Soltau was hired to clean things up.
It implemented a “Renewal Strategy Plan”, in which JCPenney significantly reduced the amount of merchandise it displayed in stores, placed a can of new paint inside and outside, introduced a clean logo and pushed a new focus on e-commerce. The company’s stock initially rose – up to 10% on the day of its announcement.
It was all downhill from there. The stock fell to less than $ 1 two months after Soltau took over because investors understood the reality: JCPenney had $ 4 billion in debt with a credit rating, a falling cash reserve and was in bad shape. signs of a quick recovery. Few buyers entered its stores, so the company was overwhelmed with excess inventory and supply chain difficulties, without a clear marketing plan or strategy. To transport excess clothing, JCPenney was forced to offer huge discounts.
Although Soltau, a former CEO of Joann and a veteran retail leader, said his improvement plan had started, the company was simply out of time. Covid-19 put the entire retail business in trouble and decimated struggling retailers like JCPenney.
In May, the famous department store chain filed for bankruptcy, having been brought to the brink of years of serious errors. The company came out of bankruptcy a month ago when shopping mall owners Simon Property Group and Brookfield Asset Management, afraid of losing one of their biggest tenants, bought JCPenney.
But his outlook remains bleak. The company has closed stores left and right and has not posted an annual profit since 2010.
The new owners of JCPenney said they would look for a new CEO who is “focused on modern retail, consumer experience and the goal of creating a sustainable and long-lasting JCPenney”. Apparently, they didn’t believe it was Jill Soltau.
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