Finance chief Jeffrey Davis’s exit from
has turned up the heat for the retailer to find a new chief executive.
Mr. Davis’s decision to depart the company, announced Thursday, comes at a vulnerable time for the troubled retailer, which already had seen its leadership ranks dwindle over the past few months.
The Plano, Texas, company has been without a CEO since June 1, when Marvin Ellison left to take the helm at
At the time, J.C. Penney named a group of four executives, known as “Office of the CEO,” to manage day-to-day operations. The exit of Mr. Davis, who was also part of that group, brings that team down to two: Executive Vice President of Supply Chain Mike Robbins and Chief Information Officer/Chief Digital Officer Therace Risch. Chief Customer Officer Joe McFarland left in July to join Mr. Ellison at Lowe’s.
J.C. Penney is coming under more pressure to fill the CEO chair, said Joel Bines, partner and co-head of retail at consulting firm AlixPartners LLP.
“They are in the danger zone and they need a leader who understands how to operate in the danger zone so that they can get themselves reoriented and have the time to figure out what comes next in retail,” Mr. Bines said.
J.C. Penney has advanced its search for a new chief executive, a company spokesman said in an email.
“The board is encouraged by the amount of interest it’s received, and expects that a decision is drawing near,” he said.
The retailer said Jerry Murray, the company’s senior vice president of finance, will assume the CFO role on an interim basis. However, Mr. Murray won’t be joining the Office of the CEO, the spokesman said in an email, adding that the two-person team will continue operating at its current capacity at this time.
The retailer must finalize its CEO pick before it can turn to filling the CFO spot, said Peter Crist, chairman for executive recruiter Crist|Kolder.
“You must have your CEO in your line of sight,” Mr. Crist said. “If I’m a CEO candidate looking at a troubled situation like J.C. Penney, I have a team in my head, and I probably have a CFO in my head who would come with me.”
This type of leadership dynamic often emerges in business turnaround situations, and as a result would turn off potential CFO candidates, Mr. Crist said.
“You can’t expect someone who’s any good to come into a CFO gig when they don’t know who their partner is,” he said.
And filling the finance chief role will be a challenge at J.C. Penney. The new CFO must be skilled at managing finances and operations, be a strategic thinker and know how to manage an array of stakeholders from creditors to analysts to investors, Mr. Bines said.
“The next CFO of J.C. Penney needs to be a Swiss army knife: extremely capable across a wide range of competencies for CFOs, and that’s a tough thing to find,” said Mr. Bines.
J.C. Penney last month reported that net sales for its fiscal second quarter fell 7.5% to $2.76 billion, missing the $2.86 billion in revenue analysts polled by Thomson Reuters forecast. Same-store sales rose 0.3% for the period ended Aug. 4, missing the FactSet estimate of a 1% increase.
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