(By Retail Sails) Less than nine months after luring Michael Francis away from Target to much fanfare, JC Penney parted ways with the marketing executive in what is just one of many worrying signs from the company of late.
Francis, who had been Target's CMO since 2008 and was credited with much of their marketing success over the past decade, was responsible for all merchandising, marketing, planning and allocation, and product development and sourcing functions.
In the November press release announcing the hire, Johnson praised Francis, who he worked closely with at Target: "He is an extremely talented executive with the vision and courage to re-imagine the department store experience. His ability to innovate and deep understanding of the industry will be invaluable as we set out to transform jcpenney into America's favorite store."
Francis was the first hire as part of an overhaul of the c-suite in building what Johnson termed his ‘dream team,' which has since been expanded with many former colleagues from Apple, Target and other major retailers.
Johnson initially received high praise from investors and analysts following his vision for a revolutionary transformation of the 110-year-old retailer, with the stock price peaking at over $43 on February 9th.
Since then, the company announced a $163 million first quarter loss, as sales plunged over 20% and comps dropped 18.9%. Internet sales were down nearly 28%, traffic fell 10% and conversions were down 5%.
In trying to simplify its pricing and promotional strategy, JCP has only managed to confuse and drive away its core shoppers.
- J.C. Penney's Customers Demand Stores Remain ‘Frumpy' (Huffington Post)
- Too Much, Too Soon Proves an Error for JC Penney (Retail Traffic)
- Discounts are already back in style at JC Penney (MarketWatch)
- JC Penney's Rational Pricing Strategy Ignores Irrational Shoppers (AdAge)
- Why Everyday Low Pricing Might Not Fit J.C. Penney (Businessweek)
- Why JCPenney's ‘No More Coupons' Experiment Is Failing (Time)
No reason or explanation was given for the departure of Francis, which was announced in a 3-sentence press release. Johnson said, "We thank Michael for his hard work at jcpenney and wish him the best in his future endeavors."
For the just over 8 months of ‘hard work', Francis will walk away with over $15 million, including a $12 million one-time cash bonus paid when he was initially hired. Following the announcement today, JCP shares were trading in after hours at $23.
"Since Ron Johnson was unlikely to fire himself due to early turnaround missteps, he appears to have decided to swing the axe over the head of the person he handpicked as president of JC Penney," said Brian Sozzi, an analyst at NBG Productions.
Analysts say Johnson has until August to prove his vision will translate into long-term success. That's when JCP will announce the expected 100 partners for its store-within-a-store strategy, which we know will include a 20,000 square foot home department anchored by the Martha Stewart shop, as well as shops by designers Betsey Johnson, Vivienne Tam, and Lulu Guiness, and collections from Jonathan Adler and Michael Graves.