J.C. Penney president abruptly leaves post
NEW YORK — In the latest sign of turbulent times at J.C. Penney Co., the midprice department store chain said Michael Francis, the former Target Corp. executive brought in to help redefine the brand, is leaving the company.
In a terse statement issued late Monday, the department store operator gave no reason for the abrupt departure of Francis, who had been on the job for a little over eight months. As president, Francis was responsible for the marketing of a controversial new pricing plan that aims to get rid of hundreds of sales events. He also oversaw merchandising and product development.
Shares fell nearly 6 percent in after-hours trading.
Penney said Ron Johnson, the former Apple executive and new chief executive, will assume direct responsibility and oversight of the company’s marketing and merchandising functions.
The surprise move comes as the department store chain is scrambling to reverse a sharp drop in customer counts and plummeting sales after Johnson’s new pricing strategy ended up turning off customers, who are accustomed to coupons and big markdowns. The plan was implemented Feb. 1.
Since announcing abysmal first-quarter results last month, Penney has been making changes to its advertising and marketing to better explain the three-tier pricing strategy that entails everyday low prices that are 40 percent lower than a year ago; monthlong sales that are deeper and are on select items; and clearance sale events or “Best Price Friday” sales.
The company has also been backpedaling as well. It added five Best Price Friday sales throughout the year, including one on the Friday before Memorial Day weekend. That’s in addition to the Best Price Friday sales that are held on the first and third Friday of every month. The company is also resurrecting the word “sales” in its advertising, a word that was taboo under Johnson’s original plan.
Still, analysts were surprised by the sudden departure of Francis, who injected a quirky, whimsical style in Penney’s advertising even though critics said they didn’t properly inform shoppers about the new pricing strategy.
The company also came out with a stylish monthly magazine that highlighted key items for sale.
“What they were doing hasn’t worked. (Francis) is the fall guy,” said Walter Loeb, New York-based retail consultant. But he said ultimately, people have to look at Johnson, who directed the pricing plan.