J.C. Penney (JCP) has issued plenty of press releases in recent months highlighting additions to the management team from places like Apple (AAPL) Dick's Sporting Goods (DKS), and Target (TGT), among others; the hiring of Michael Francis kicked off CEO Ron Johnson’ s talent roundup, as outlined in this press release from last October:
J. C. Penney Company, Inc. today announced that Michael R. Francis has been named president of the Company, effective Oct. 4. Mr. Francis, most recently a senior executive at Target Corporation, will report to incoming jcpenney Chief Executive Officer Ron Johnson.
Mr. Francis, 48, will be responsible for all merchandising, marketing, planning and allocation, and product development and sourcing functions at a time when the Company is focusing on redefining the department store.
Mr. Francis has more than 25 years of merchandising and marketing experience. He spent most of his career at Target, which he helped transform into the nation's leading upscale discount store, serving as executive vice president and chief marketing officer since 2008.
"I am thrilled to welcome Michael to our team," said Mr. Johnson. "He is an extremely talented executive with the vision and courage to re-imagine the department store experience. His ability to innovate and deep understanding of the industry will be invaluable as we set out to transform jcpenney into America's favorite store."
Mr. Francis said, "This is a tremendous opportunity for me to get back to department store retail. I began my career working on the sales floor of the State Street Marshall Field's in Chicago. It was there where my passion for retail began and my understanding of the power and potential of the department store was formed. I am delighted to join jcpenney and work with Ron and the talented jcpenney team to help accelerate the momentum already taking place."
Fast forward just eight months, and it appears that something has changed; JCP issued this short press release today:
J.C. Penney Company, Inc. ("jcpenney") today announced that Michael Francis will be leaving the Company, effective today. Chief Executive Officer Ron Johnson will assume direct responsibility and oversight of the company's marketing and merchandising functions.
Johnson said, "We thank Michael for his hard work at jcpenney and wish him the best in his future endeavors."
This type of release generally comes with the “personal reasons” line, regardless of if that has any connection with what really happened in the C-suite; the lack of any explanation is a red flag that shouldn’t go unnoticed. Investors should take some comfort in the fact that Ackman has seen his fair share of corporate dysfunction, and will likely act swiftly to make sure that any potential fires are smothered.
About the author:
As it relates to portfolio construction, my goal is to make a small number of meaningful decisions. In the words of Charlie Munger, my preferred approach is "Patience followed by pretty aggressive conduct." I run a concentrated portfolio, with a handful of equities accounting for the majority of my portfolio (currently two). In the eyes of a businessman, I believe this is adequate diversification.