JCPenney’s new female CEO will boost company, analyst says

Experts say JCPenney’s new
CEO has her work cut out for her.
Business Insider/Mary Hanbury

• JCPenney has
  
  hired a new CEO, Jill Soltau. 
• This the first female CEO the company has had, and at least
  one analyst says that’s cause for celebration. 
• JCPenney has been accused of alienating its core customer,
  the middle-aged mother, in recent years. The hope now is that
  Soltau will win back this customer by creating a more targeted
  shopping experience. 

JCPenney
just
appointed a female CEO, and at least one analyst says that’s
cause for celebration. 

Jill Soltau, who was formerly CEO of craft and textile
retailer Joann Stores, will be taking the position effective
October 15.

JCPenney’s stock rallied more than 10% on the news, as investors
were likely relieved to hear that the position had been filled
after several months of
uncertainty.

However, this boost in confidence could also be tied to the fact
that for the first time ever, JCPenney has a woman at the
helm. 

“In our view, putting an experienced female executive in the top
role is a sensible move. One of JCPenney’s central problems has
been its inability to connect with women shoppers, especially in
terms of fashion,” Neil Saunders, managing director of GlobalData
Retail, wrote in a note to clients on
Tuesday afternoon. 

In recent years, JCPenney has been accused of failing to serve
its core customer, the middle-aged mother, in its bid to win over
younger shoppers. Both experts and its own
executives blame this for its current woes. 

In a statement to the press on Tuesday, Soltau made it clear that
the value-conscious female shopper is going to be front and
center in her mind.

“I am highly passionate about the customer and I spent my
entire career focused on the needs of a value-based consumer by
researching, understanding and meeting her expectations for
style, quality and inspiration,” she said. 

What went wrong

Scott Olson / Getty Images

The confusion in JCPenney’s shopping experience over the past few
years could be partly attributed to its frequent CEO turnover,

experts say. Each one had different visions for the company
and for the type of customer that it should be targeting.

Ron Johnson, who was CEO between 2011 and 2013, had
arguably the most extreme impact on the business. After his
tenure was over, JCPenney was left drowning in debt and
reported
a $1.42 billion operating loss in 2013. Johnson tried to make
the store more upmarket but ended up alienating its
value-conscious customers in the process.

Marvin Ellison, who took the reins in 2015 after a period
in which Mike Ullman was brought back as interim CEO, has been
widely credited with trimming down its massive debt load.
However, some experts say he didn’t do enough to bring back the
core customer and clearly define the shopping experience for
them. 

“He never did the work to really understand and commit to a
customer,” Kathy Gersch, executive vice president of the
consultancy firm Kotter, told Business Insider.

Gersch believes that Soltau’s top priority should be just
this. 

“She needs to really understand who the customer is, what
they want from JCPenney, and how it goes about taking what they
have and creating something unique for that customer,” she
said.

“Frankly, it is the same thing that the other past folks
that stepped into this needed to do and still haven’t
successfully done.”

But many are hoping that Soltau will have an advantage over her
predecessors. 

“We believe Ms. Soltau will have a far more intuitive
understanding of the changes that need to be made than many of
those who held the role before her. This, along with her deep
experience of retail — especially in terms of merchandising —
will prove invaluable in turning the retailer around,” Saunders
said.