Summary
J.C. Penney has tapped Jill Soltau as its new CEO.
Soltau has a large amount of relevant experience with merchandising and apparel at companies with a similar customer base as J.C. Penney's.
J.C. Penney marks a step up in terms of company size, as she is coming from JOANN Stores, which does roughly one fifth of J.C. Penney's revenues.
Good CEO hires do not necessarily result in a successful turnaround, as seen with Kathryn Bufano's experience at Bon-Ton.
Soltau does have a better starting point with J.C. Penney though as its liquidity situation and ability to invest in its business now is significantly better than Bon-Ton's was in 2014.
Looking for a community to discuss ideas with? Distressed Value Investing features a chat room of like-minded investors sharing investing ideas and strategies. Get started today »
J.C. Penney (JCP) has found its new CEO, hiring Jill Soltau to lead the attempt to jumpstart its business, which has been dealing with stagnant comparable store sales and declining gross margins. Soltau appears to be a strong pick, with plenty of apparel and merchandising experience at companies with consumer bases similar to J.C. Penney's.
However, it should be noted that even strong CEO picks may fail to turn around the fortunes of struggling department stores given the headwinds surrounding the sector (particularly middle-class department stores. For example, Kathryn Bufano brought strong relevant credentials when she became Bon-Ton's CEO, but it still ended up going bankrupt within four years. J.C. Penney is in somewhat better shape than Bon-Ton was when Bufano became CEO, but the challenges of turning around these department stores should not be underestimated.
