Stock drops after J.C. Penney executive departs

J.C. Penny executive out

After ruffling feathers and making changes to how department stores traditionally operate, J.C. Penney is undergoing another shakeup to their acclaimed executive team. Marketing Chief, Michael Francis is leaving after taking over merchandising, marketing, and product development in October, as part of an effort to revamp and refocus the brand.

Francis, Former Target executive, was handpicked by J.C. Penney’s Chief Executive Officer, Ron Johnson and made responsible for marketing and product development, and merchandising, which will now be controlled by Johnson.

In one of the shortest news releases¹ we’ve seen in a long time, the only statement was that Francis was leaving, with a note from Johnson that said, “We thank Michael for his hard work at J.C. Penney and wish him the best in his future endeavors.”

Why the departure?

The changes at the department store were highly criticized, despite praise. Some believe he will be the scapegoat for the company’s use of ads featuring gay couples as parents, or keeping on Ellen Degeneres as a spokesperson. Others note that the company lost $163 million in the first quarter alone, with revenues down 20.1 percent. In the first quarter, the company says that same-store sales dropped 19 percent compared to the first quarter of 2011.

A recent marketing campaign was said to have confused customers, leading them to actually shop at their competitors, and inconsistent commercials, despite removing confusing couponing systems which some say many were addicted to, have consumers rejecting the new brand.

According to Bloomberg, J.C. Penney stocks fell 10 percent to $21.84 at 11:18 a.m. in New York, the biggest intraday drop since May 16.

It is unclear as to whether this exit was truly voluntary, or if there will be more departures, but Johnson, who was formerly the Senior Vice President of Retail Operations for Apple, Inc. will likely turn around the executive team, just like he turned around the interiors of the once drab stores.

¹ J.C. Penney news release of Francis’ departure