J.C. Penney Co. Inc. (NYSE: JCP) announced Tuesday morning that its board chair and chief executive officer, Marvin Ellison, will leave the company in June to take over as CEO of home improvement giant Lowe’s Companies Inc. (NYSE: LOW). Lead independent director Ronald Tysoe becomes chair of the board effective immediately, and Ellison will remain as a director and CEO through June 1.
Ellison takes over as president and CEO at Lowe’s on July 2, replacing current Chair and CEO Robert Niblock, who is retiring. Lowe’s named Richard Dreiling as its new board chair, also effective July 2.
Ellison joined J.C. Penney in November 2014 as president and CEO and was named board chair in August of 2015. He joined the venerable retailer following a 12-year career at Home Depot Inc. (NYSE: HD), where he held the post of executive vice-president of stores at the time of his departure.
His tenure at J.C. Penney was far less successful than his four years as the head of Home Depot’s stores. From the time he took over in 2008 until he left, Home Depot stock rose 250%. During his nearly three-and-a-half year stint at J.C. Penney, the shares have dropped nearly 67%.
Ellison introduced appliances to J.C. Penney in February 2016, and the company’s stock price posted a multiyear high nearly $12 a share by mid-March. By December of that year, shares were still trading near $11.
Then the bottom fell out of retail, and department stores were probably the hardest hit. The weakest ones, including Sears and J.C. Penney, closed stores and took other measures to prop up results, but it didn’t happen for Sears and it’s unlikely to happen for J.C. Penney.
Ellison’s departure may or may not signal the end for J.C. Penney, but investors who took the stock down nearly 9% when the news was first announced have jumped back in and narrowed the loss to around 2%.
Lowe’s, while not sinking in the same way as J.C. Penney had been when Ellison took over, is nevertheless growing far more slowly than Home Depot. Since May of 2015, Home Depot shares have added nearly 68%, while Lowe’s shares are up about 24%. Ellison’s job will be to close and even reverse that gap.
J.C. Penney’s shares traded at $2.48 early Tuesday, down just 0.5% after posting a new all-time low of $2.28 just after the opening bell. The stock’s 52-week high is $5.63.
Shares of Lowe’s were last seen trading at $87.00, down just 0.4% on the day, in a 52-week range of $70.76 to $108.98.
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