Online shopping is more and more popular, while physical stores are taking hit after hit. One of them is JCPenney, constantly trying to launch new offers, including rewards cards and other gifts.
However, the company’s stock price was seriously affected this Tuesday morning, after CEO Marvin Ellison announced that he’s planning to leave the company, in order to be in charge at home-improvement retailer Lowe’s.
Is the so-called end of retail close?
According to Business Insider, analysts believe that this departure could actually signal his lack of confidence in JCPenney, as well as department stores overall, as he’s making a move to an area of retail that has been considered more Amazon-proof.
“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,” said Neil Saunders of GlobalData Retail, in a note to clients on Tuesday.
Marvin Ellison became CEO back in 2015, after spending 12 years at Home Depot. His main task was to bring the department store back from almost-disaster. Considering his departure and declarations, it can be said that he failed to fulfill his mission, even though sales stabilized for a while.
Rough times ahead
This is definitely a bad moment for JCPenney to lose its CEO, as it’s one of the few retailers who reported weaker-than-expected sales for Q1 of 2018. Now, without Mr. Ellison, the retailer could find itself in an even worse situation, at least in the short term. He will be replaced by a team of four executives – temporarily – until a new CEO is found.
Obviously, the new person in charge of the company will have a difficult mission. Since people prefer online shopping, especially for goods similar to those offered by JCPenney, the retailer must come with something truly innovative in order to attract people to store.
We won’t be surprised if we will see more retailers in a similar situation, basically confirming a theory claiming that it won’t be long until all of them will shut down their businesses.