JC Penney CEO Marvin Ellison departs for Lowe's

JC Penney CEO Marvin Ellison departs for Lowe's

Ellison will remain CEO of the retail company until June 1, 2018, but will ultimately be leaving his position "to pursue another opportunity with Lowe's Companies".

J.C. Penney shares plunged Tuesday after Lowe's announced it is naming Ellison president and CEO, effective July 2.

Ellison has notified the Company of his decision to resign from his role to pursue another opportunity with Lowe's Companies, Inc.

Results last week showed J.C. Penney missed same-store sales estimates for the quarter ended May 5 and it cut its full-year profit forecast because of changes to its accounting standards. Still, that represents significant improvement over the years before he took over.

Before working for JC Penney, Ellison worked for The Home Depot, one of Lowe's competitors in the home improvement sector, for 12 years.

The departure could hardly arrive during a more precarious time for J.C. Penney. The next year, the company added more than $2.5 billion in debt to its books. The Russell 2000 index of smaller company stocks gave up 0.7 percent to 1,625.24 after it closed at record highs the four previous trading sessions.

Niblock has served as interim CEO since announcing his early retirement earlier this spring.

DRIVE ON: The government of China said it will reduce auto import duties effective July 1 following pledges to buy more US goods and end restrictions on foreign ownership in the industry. At The Home Depot, Ellison oversaw USA sales, operations and Pro strategic initiatives, dramatically improving customer service and efficiency across the organization to serve both do-it-yourself (DIY) and Pro customers. However, he is stepping down from the Chairman role immediately.

"Ellison's exit will raise speculation that he is not particularly optimistic about the future prospects of [Penney] and sees the grass as being greener at Lowe's", wrote Neil Saunders, managing director of GlobalData Retail in a note. And at day's close, J.C. Penney shares were down 6 percent while Lowe's shares were down 1.88 percent.

"Attracting Marvin is a great win for the entire Lowe's team", said Marshall Larsen, the lead director of the Lowe's board. "We look forward to shepherding an exciting new chapter for Lowe's under Marvin's leadership".

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