(Reuters) – JC Penney ( JCP.N ) Chairman Marvin Ellison leaves the battered retailer to join the hardware store chain Lowe's Cos Inc ( LOW.N ), Companies said on Tuesday, stocks of the US department store chain by 4 percent.
FILE PHOTO: A Shopper Leaves the JC Penney Department Store in North Riverside, Ill., USA, November 1
7, 2017. REUTERS / Kamil Krzaczynski
Ellison joined Penney in 2014 with a strong reputation spanning over 12 years Lowe was solidified as the largest competitor, Home Depot Inc. ( HD.N ), and shares in Lowe's gained up to 3 percent on the news of his appointment prior to the withdrawal.
The 52-year-old will take the lead on 2 July.
At JC Penney, Ellison was tasked with curbing a two-year decline in sales as the company enters a brutal US retail landscape where customers are increasingly turning to online shopping.
The chain was hit hardest by a collapse in mall traffic and led to the closure of thousands of stores in the US over the past five years. JCP's market value fell to $ 2.29 on Tuesday from $ 87 a share a decade ago.
FILE PHOTOGRAPHY: Gregory A. Sandfort (L), CEO of Tractor Supply Company, and Marvin Ellison, CEO of JC Pennys, speak to the visit of US President Donald Trump to a hearing session with the Retail Industry Leaders Association Last week's results showed that JC Penney missed the same quarter store sales forecasts for the quarter ended May 5, and its sales lowered its forecast for the year due to changes in accounting standards. Stocks fell 12 percent that day.
"Marvin Ellison's departure from J.C. Penney is another signal to investors that the company is in dire need," said Jason Benowitz, Senior Portfolio Manager at the Roosevelt Investment Group in New York.
"The captain does not go down with the ship, but instead chooses to save himself."
The company said Ellison would remain until June 1, but resign immediately as chairman.
Subsequently, a group of four executives, including CFO Jeff Davis, will take over the day-to-day business until a new CEO is appointed.
Lowe & # 39; s has also lost market share for many years as Home Depot sales are in the same business.
"I believe we (Lowe's) will not only compete but win in today's complex retail environment," Ellison said in a statement.
"Together, we'll use Lowe's omni-channel capabilities to deliver the simplest and most seamless customer experience."
Lowe's former boss Robert Niblock said in March he would retire after 13 years.
Reporting by Yashaswini Swamynathan in Bengaluru; Arrangement by Arun Koyyur and Patrick Graham