Dive Brief:
- J.C. Penney has hired Stephanie Plaines as its new chief financial officer, effective Thursday, the company announced.
- Plaines most recently was CFO at real estate advisory Jones Lang LaSalle. She has also held senior executive roles at Starbucks, Walmart and Ahold Delhaize.
- With Bill Wafford’s departure last year from the CFO spot at J.C. Penney, Brian Cashman had served as interim CFO, according to Cashman’s LinkedIn page.
Dive Insight:
J.C. Penney has cycled through a cadre of CFOs in the years leading up to and following its bankruptcy. Wafford joined in 2019, as the retailer’s financial struggles were mounting.
Chief among those struggles were persistent performance problems and a hefty debt load, in part a legacy of former CEO Ron Johnson's famously failed attempt to reinvent the department store a decade ago.
While the company began 2020 with what executives said was ample liquidity, it ran headfirst into a pandemic. Bankruptcy followed, and the company was able to sell itself in Chapter 11 to two of its largest landlords, including Simon Property Group, and avoid full liquidation in the process.
Unlike former CEO Jill Soltau, Wafford initially remained at Penney after its operations came out of bankruptcy and under new owners. In fact, Wafford was paid $1 million to stay on per retention bonuses paid out to top executives just before the company filed for Chapter 11. (Wafford’s eventual departure for Thrasio came just months after an early 2021 date tied to the bonus.)
Up until the recent disruptions in the retail market caused by inflation and other macroeconomic turbulence, Penney has done well, according to its owners.
“We had an unbelievably strong year last year with Penney and Sparc,” Simon Property Chairman and CEO David Simon told analysts earlier in August. “We're still projecting really high EBITDA growth for these companies. And even though they're — obviously, their consumers [are] being cautious, back-to-school so far is off to a good start. Our traffic is actually pretty good.”
With the operational environment changing, Simon noted that the retailer’s management team and that of Sparc — a co-venture with Authentic Brands Group that runs Forever 21, Brooks Brothers, Eddie Bauer and other retail banners — are making adjustments.
“They rein in discretionary capital. They watch the overhead. They really don't close stores because stores are profitable to them,” Simon said, according to a Seeking Alpha transcript. “They watch marketing expenses that — they're very focused on the payback when it comes to return on investment.”
Simon added on the conference call that Penney has seen recent softness in its performance, while also pointing out it had $1.3 billion in liquidity. Simon also noted that his company has net zero investment left in Penney and Sparc thanks to cash distributions to Simon Property from those holdings. “It’s all upside from here,” Simon said.
All of that sets the stage for Plaines’ arrival as CFO as the retailer is still searching for its footing in an ever-changing environment for department stores.
J.C. Penney CEO Marc Rosen said of Plaines that her “deep strengths in data-forward financial management and track record of value creation will make her an invaluable advisor throughout the business as we develop new digital and technology capabilities to advance our transformation agenda.”
