We visited a JCPenney store a day after its CEO resigned abruptly, and it was a complete mess
- JCPenney's CEO, Marvin Ellison, resigned from the company suddenly on Tuesday.
- Ellison, who became CEO in 2015, was tasked with bringing the department store back from the brink of financial disaster.
- Analysts say his departure could signal a lack of confidence in JCPenney - and in department stores in general. We visited one of its stores in Manhattan to see what it was like to shop there.
The man behind JCPenney's turnaround is out, and now investors are wondering what will happen next.
On Tuesday, the department store announced that its current CEO, Marvin Ellison, is resigning to lead home-improvement retailer Lowe's as its CEO. Ellison joined JCPenney in 2014 and became CEO in 2015.He launched a turnaround effort to bring it back from the brink of financial disaster. His immediate predecessor, Ron Johnson, tried to make the store more upmarket but alienated core customers in the process, leading to a $1.42 billion operating loss in 2013 and nearly $5 billion of debt.
Ellison had seen some success, but analysts say he's jumped ship before the job was finished. In the past few years, sales at JCPenney have stabilized, and Ellison has worked to reduce its debt load. However, the retailer still carries $4.1 billion in long-term debt.
"The departure of Marvin Ellison from JCPenney could not have come at a worse time for the beleaguered department store chain. The turnaround program that Ellison put in place has partly delivered but is still far from complete," Neil Saunders of GlobalData Retail said in a note to clients on Tuesday.
Moreover, analysts are now speculating whether his departure signals a lack of confidence in the store's future.
"Ellison's exit will raise speculation that he is not particularly optimistic about the future prospects of JCPenney and sees the grass as being greener at Lowe's," Saunders wrote.
We visited its only location in Manhattan, situated in the Manhattan Mall near Herald Square, to find out what it is like to shop there: