Tuesday, June 19, 2012

J.C. Penney stock falls after Michael Francis ousted as president

J.C. Penney Co. Inc.?

Shares of the Plano-based department store chain were trading around $21.89 at 10 a.m. CST, down about 10 percent.

In a brief press release Monday, the company announced Francis? departure nearly nine months after he joined the company as one of CEO Ron Johnson?s first hires.

Francis, who was formerly chief marketing officer of Target Corp.?

His departure lowers the confidence of many on Wall Street.

?It?s a catastrophic blow to the bull case for the shares,? said Deutsche Bank analyst Charles Grom in a report titled ?You just can't make this stuff up: Francis Out @ JCP.?

Others believe Francis may be a fall guy for Penney?s unclear message.

?The sudden nature of the departure underscores, in our opinion, the big-time mistakes J.C. Penney has made in articulating [its] new image,? Brian Sozzi, an analyst at NBG Productions, said in a Wall Street Journal article.

Francis will not leave J.C. Penney totally empty handed. He was paid a one-time signing bonus of $12 million and had a base salary of $1.2 million. Francis was also given 1 million shares of restricted stock.

Steven covers retail, hospitality, marketing and public relations.

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