Lowe’s Secures New CEO From JCPenney
- Lowe’s takes in more than 5 times as much revenue as JCPenney
- Ellison retired $1.4 billion of JCPenney’s debt
Lowe’s (LOW +0.21%) announced Marvin Ellison will take the reigns of the home improvement chain. He is once again being tasked with creating another turnaround plan for a struggling retailer. Will he be able to revamp Lowe’s much like he accomplished at JCPenney (JCP -1.71%)?
Why This Matters: Lowe’s takes in more than five times as much revenue as Penney. Its market capitalization is roughly $73 billion compared to less than $1 billion for the problem ridden department-store chain.
Penney’s was in crisis when Ellison joined. During his tenure at the company he strengthened its balance sheet by retiring $1.4 billion in debt. However the company is still in peril and lost $78 million in the most recent quarter. Many traditional chains like Penney continue to struggle as spending moves more towards e-commerce, putting more pressure on retail profits.
Ellison previously worked at Target and spent a dozen years at Home Depot (HD -0.16%). He was the first African-American to join Home Depot’s senior ranks and left for Penney after missing out on the top job there. In his role at Penney he was mandated to plug the store’s countless leaks in operations, strategy, and technology. These are nearly identical shortcomings he will face at Lowe’s as they look to catch up with the leader in the space Home Depot.
What’s Next: Lowe’s said Ellison would officially join the seller of paint and plywood on July 2. He will earn the same base salary of $1.45 million that he did at Penney, along with a target bonus of $2.9 million.
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