This is not the end that JCPenney had in mind for Soltau when she was performed in October 2018 – at least not so soon. Few expected JCPenney to avoid bankruptcy altogether with its enormous debt that would pay off over the next few years. But the pandemic pushed JCPenney to the brink much faster than anyone thought.
On January 1, Stanley Shashoua, chief investment officer of Simon Property Group, JCPenney’s interim CEO, becomes the fourth company in six years.
When Soltau took over JCPenney, the store was a mess. Former CEO Marvin Ellison has introduced devices in the store to get former Sears customers to move across the mall to JCPenney, from one bankruptcy store to another. The gambit failed, Ellison left for Lowe’s, and Soltau was hired to tidy things up.
She implemented a “Plan for Renewal Strategy”, in which JCPenney reduced the amount of merchandise it displayed in the store, painted a fresh can of paint inside and out, introduced a cleared logo, and a new focus on e-commerce. The company’s share initially rose – by 10% on the day of its announcement.
It was all downhill from there. The stock fell below $ 1 two months after Soltau took the lead because investors understood the reality: JCPenney was $ 4 billion in debt with a junk credit rating, declining money supply and showed no signs of a quick turnaround. . Few purchases came in its stores, and the company was saddled with a stock solution and the supply chain struggled without a clear marketing plan or strategy. To move excess clothing, JCPenney was forced to offer strong discounts.
Although Soltau, Joann’s former CEO and a veteran retail leader, said her improvement plan had started working, the company was simply not over. Covid-19 has put the entire retail business in distress and struggling retailers like JCPenney.
In May, the retail chain filed for bankruptcy because it had been brought to the brink for years. The company went bankrupt a month ago when Simon Property Group and Brookfield Asset Management, fearful of losing one of their biggest tenants, bought JCPenney.
But its prospects remain bleak. The company closes stores left and right and has made no annual profit since 2010.
The new owners of JCPenney said they would look for a new CEO who is “focused on modern retail, the consumer experience and the goal of creating a sustainable and lasting JCPenney.” Apparently they did not believe it was Jill Soltau.