J.C. Penney’s sales have plummeted in the past two years, with the company experiencing a 56% drop in share price in 2013 alone. Despite multiple attempts to salvage remaining sales and improve customer retention rates, J.C. Penney’s financial outlook continues to appear bleak. Recently, J.C. Penney announced that current CFO Ken Hannah will be replaced by Ed Record on March 24, 2014.
2-Year Sales Slump
This recently announced change in CFOs is a strategic attempt by J.C. Penney to recover losses and increase revenue. During the past two years, multiple factors have contributed to the company’s current state, including the removal of private brands from stores and a reduction in coupons and deals for customers. As a result, many loyal customers left J.C. Penney for brands that offer better deals.
Recovery Efforts Fall Short
To battle the company’s sales slump, J.C. Penney’s executive leadership has taken a few bold steps. The company brought back Mike Ullman, former CEO, in 2013 and rejuvenated its marketing team with new members. So far, Ullman’s leadership has been beneficial for the company, as it witnessed improved sales in 2013’s third quarter.
Recovery efforts continue to fall short, however. In addition to revamping various departments, a recommendation made in part by current CFO Ken Hannah, J.C. Penney is attempting to re-evaluate pricing strategies and improve customer loyalty programs. To meet ambitious sales goals and reaffirm its industry position, J.C. Penney is adding experienced CFO Ed Record to the team.
A graduate of Carnegie Mellon University, Ed Record is well-respected in the financial community. Record has a strong history of leadership in the retail industry. In 2005, Record became Senior Vice President of Finance at Kohl’s Department Stores. After two years in this position, Record moved on as CFO of Stage Stores and was promoted to Chief Operating Officer two-and-a-half years later.
J.C. Penney in 2014
The decision to hire Record was a strategic move on CEO Mike Ullman’s part. Hannah’s lack of retail experience did not help J.C. Penney stave off financial loss. With Record on board, J.C. Penney hopes to gain the momentum it needs to reemerge as a leader in the retail market.
Do you think Ed Record will improve J.C. Penney’s outlook in 2014?