After the departure of President Michael Francis, JC Penney’s shares go down. According to the Associated Press (AP) shares were down on Tuesday $2.46, about 10 percent, to $21.87 in a midday trading—after selling for nearly $40 in February.
Francis a member of the “dream team” JC Penney assembled to work on the company’s image, merchandising, pricing and product development.
A few weeks ago Francis presented JC Penney’s disappointing second quarter reports. In January Francis brought in CEO Ron Johnson, a former Target and Apple retailing executive about a turnaround plan that includes many changes to the company.
JC Penny provides little explanation to Francis’ departure and his short-lived position as president. Analysts, Charles Grom of Deutsche Bank calls Francis’ departure a “catastrophic blow.”
Analyst, Brian Sozzi of NBG Productions, told the Associate Press (AP) that Francis may have been a fall guy for JC Penney’s failures with customers.
Back in April the retailer launched an ad campaign called “Do the Math” which is meant to show it’s customers the current system offered priced cheaper and less of a hassle to than combing a sale with a coupon but was confusing. JC Penny wanted to avoid using the term sale, but in turn drove customers away.
“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 hand picked as president,” said Sozzi.
What’s even more troubling for the company is the lack of “continuity” in the company. The departure of Francis shortly follows the loss of the company’s chief financial officer, Michael Dastugue. According to Analyst at Nomura, Paul Lejeuz, “The departure of Francis does not help build confidence that the grand turnaround plan envisioned in January will materialize.”