With last week's departure of JCPenney (NYSE:JCP) COO Michael Kramer, the first wave of the executives that former CEO Ron Johnson hired are gone. The question now for returning CEO Mike Ullman is how much more housecleaning he will do—and whether he intends to re-create the team he had before he was pushed out in 2011. At least one analyst thinks that's exactly what Ullman should do, The Associated Press reported on Friday (April 19).
Citi analyst Deborah Weinswig points out that Ullman has already rehired one former member of his executive team: Ken Mangone is returning as EVP of product development, design and sourcing. JCPenney also still has executives who survived from Ullman's previous tenure in merchandising (Liz Sweney), planning and allocation (Clarence Kelley) and store organization (Tim Nichols). But Weinswig describes the retailer's marketing, finance, human resources and operations areas as "lacking talent."
Translation: Old-guard execs in those areas have been replaced, in some cases by old colleagues of Johnson and Kramer. JCPenney's marketing chief is Eric Hunter, who worked for Kramer at apparel supplier Kellwood, and Hunter's team has lost several experienced (that is, pre-Johnson) members over the past seven months. Finance means CFO Ken Hannah and Controller Mark Sweeney, both hired by Johnson in 2012. HR chief Dan Walker, who originally recruited Johnson for Apple (NASDAQ:AAPL), left JCPenney on April 12, so the talent is literally not there.
And operations most obviously means now-departed COO Kramer, but Weinswig may also mean supply-chain chief John Singleton and IT chief Kristen Blum, both of whom worked under Kramer at Abercrombie & Fitch (NYSE:ANF).
Blum in particular presents a challenge for the idea of an old-guard revival for Ullman. Many of the execs who worked for Ullman until 2011 have moved on to other retailers and may not be available if he wants to reassemble his old team (former CIO Ed Robben falls into that category). But in Blum's case, what can't be reassembled is literally JCPenney's old IT shop. The chain is nine months into a conversion from custom mainframe systems to packaged Oracle (NASDAQ:ORCL) applications that probably can't be reversed at this point.
On the other hand, Blum may have a survival advantage. Johnson, Kramer, Walker and several other execs who are rumored to be heading for the door never actually moved to JCPenney's Plano, Texas, headquarters. They commuted from California or New York by company jet, staying during the week at the Dallas Ritz-Carlton.
But Blum already lived in the Dallas area when she was hired at JCPenney. Before that, she worked as CIO for PepsiCo (NYSE:PEP)—in the company's Plano office.
- See this AP story in Businessweek
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