By Neil Saunders
The departure of Marvin Ellison from JCP could not have come at a worse time for the beleaguered department store chain — which is one of the few U.S. retailers to have struggled over the first quarter.
That Ellison is skilled in operations and people management means his appointment is a coup for Lowe’s.
The turnaround program that Ellison put in place at JCP has partly delivered but is still far from complete. There is now a question mark over how this plan will proceed and, indeed, whether JCP will remain on the same trajectory. This uncertainty is bad for both investors and staff.
Ellison’s exit will also raise speculation that he is not particularly optimistic about the future prospects of JCP and sees the grass as being greener at Lowe’s. Indeed, exiting before his plan is complete is a tacit admission that he may not be able to deliver what investors are looking for. This will be particularly damaging to staff morale, especially because Ellison is a popular leader who has connected well with almost everyone he works with.
That Ellison is skilled in operations and people management means his appointment is a coup for Lowe’s. The retirement of Robert A. Niblock, who has led Lowe’s through a successful period, could have caused some disruption. By putting Ellison in his place, Lowe’s has reassured the market that it will continue to be led by a seasoned retail executive.
Neil Saunders is managing director of research firm GlobalData Retail.