J.C. Penney's Francis heads for the exit
- Article by: STEPHANIE CLIFFORD
- New York Times
- June 18, 2012 - 10:35 PM
The No. 2 executive at J.C. Penney Co. Inc. is out after only eight months on the job.
Michael R. Francis, who as president oversaw marketing and merchandising, is leaving the company immediately, the retailer said Monday.
Ronald B. Johnson, former chief of retail at Apple Inc. and Penney's chief executive, will take control of the marketing and merchandising departments.
As Penney announced its turnaround plans only in January, it is a startlingly quick departure, particularly given the $12 million signing bonus Francis received in October. He previously was chief marketing officer of Target.
But Penney has taken heat on the marketing front for promising to simplify pricing and to run fewer sales, then backtracking on those moves.
In January, Penney said it was unveiling a new approach to retailing. In a sleek presentation to investors and reporters, Johnson and Francis described how the company was getting rid of its nonstop sales.
Instead, it said it would provide "fair and square pricing" with everyday low prices, "monthlong value" specials and clearance events beginning twice a month.
But that strategy seemed to confuse consumers.
In May, Penney reported first-quarter results and said its sales at stores open at least a year had dropped 18.9 percent compared with the same quarter a year earlier.
"We've got to work harder to move our marketing from building a brand, which is a long-term great thing to do, in the short run to really helping people understand our pricing strategy," Johnson said then.
He outlined changes Penney was making to its ads, like being clearer on how much money people were saving with that everyday price.
The company is also adding more of its clearance events, according to a report from Deutsche Bank. And last month, Johnson told investors it was jettisoning that "monthlong value" term and just calling a sale a sale.
Share price sags
Though the pricing approach has faltered, Penney's overall marketing under Francis and other new executives has won positive reviews from advertising executives for its clean, cheerful look.
After his appointment as chief executive last year, Johnson replaced most of the top executives.
Penney's stock was down more than 5 percent in extended trading Monday after the announcement, to $23, a decline of almost 50 percent from its one-year high.
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