J.C. Penney CEO Jill Soltau exits abruptly, as new owners say they’ll seek someone focused on ‘modern retail’
J.C. Penney’s new owners, Simon Property Group and Brookfield Asset Management, said Wednesday that they have launched a search for a successor to CEO Jill Soltau.
Her last day is Thursday. A retention bonus of $4.5 million that the retailer’s board of directors granted Soltau in May, right before the company filed for Chapter 11 bankruptcy, required her to pay back 80% if terminated for cause before Jan. 31, 2021.
“The search will seek to identify a leader that is focused on modern retail, the consumer experience, and the goal of creating a sustainable and enduring J.C. Penney,” Simon and Brookfield said in announcing the CEO search.
Stanley Shashoua, Simon’s chief investment officer, becomes interim CEO, effective Friday. The new ownership group also created a temporary office of the CEO to include key members of Penney’s existing leadership team, but didn’t identify them.
The Penney board members, which has hired Soltau, B. Craig Owens, Lisa Payne, Leonard Roberts, Javier Teruel and Ronald Tysoe — all resigned, according to a federal filing on Friday. Owens and Payne have been on the board since 2014 and 2016, respectively, but Roberts and Teruel tenure dates back to the the 2000s. Tysoe was chairman since 2018 and joined the board in 2013.
Penney’s new owners said they have “a successful track record of turning around retailers and brands and restoring them to profitability.” They also said that Authentic Brands Group, which had been rumored as a buyer of Penney early on in the bankruptcy, will work with them as a strategic partner.
Authentic Brands formed a partnership in 2016 with Simon that separately owns five other mall-based retailers. The partnership, called Sparc Group, started out with the purchase of Aéropostale and has since added Nautica, Forever 21, Lucky Brands and Brooks Brothers.
The new owners declined a request for an interview. Soltau couldn’t be reached for comment.
Three weeks ago, when the sale of Penney was completed, Simon Property chairman and CEO David Simon said Penney was “now poised for a future focused on innovation and consumers, while continuing to navigate through the pandemic.”
The purchase of Penney’s operating company was valued at $1.75 billion, including the assumption of debt. Separately, Penney’s first-lien lenders were paid with a new property company that owns 160 Penney stores and six distribution centers. Penney signed leases for the buildings it used to own.
It’s likely that Authentic Brands will play a big role in the CEO search and how Penney moves forward.
Authentic Brands, owned by private equity firms, describes itself as a “curator and guardian of brands.” It owns 50 diverse brands, including Thomasville and Sports Illustrated. Founded in 2010, it operates 6,000 stores worldwide with annual sales of $14 billion, according to its website. Its founder and CEO Jamie Salter has said the pandemic has created opportunities.
Simon and Brookfield are the two largest U.S. mall operators. The new owners have a big stake in seeing Penney survive at malls across the U.S. and locally, including Stonebriar Centre in Frisco, Town East Mall in Mesquite, Barton Creek Square in Austin and Broadway Square in Tyler.
Penney is an anchor in about 60 of Simon’s 200 shopping centers. About 100 of Brookfield’s 170 shopping centers have a Penney store.
Soltau joined Penney as the first woman to head the 118-year-old brand. She had been credited with previously turning around JoAnn Stores, a fabric and crafts company of 850 locations in 49 states.
She kept some longtime Penney people on her team, but also brought in talent from the outside, including chief merchandise officer Michelle Wlazlo, who brought 30 years of retail experience in key jobs at Target and Gap. Wlazlo launched new merchandise at Penney even during the bankruptcy reorganization.
Throughout the bankruptcy and even before, Soltau kept a low profile. She came to Penney after another abrupt departure by Marvin Ellison, who left to become CEO of Lowe’s. Soltau had made progress with a new management team she put in place, but a looming debt restructuring and the pandemic forced the chain into bankruptcy.
Penney’s staff is currently operating virtually after exiting its longtime Plano campus on Legacy Drive as part of its bankruptcy reorganization. The retailer has closed more than 150 stores and reduced its total employment from 85,000 when it filed for bankruptcy to about 60,000 now.
Clarifications from a Thursday J.C. Penney federal filing.
An earlier version of this story said that chief financial officer Bill Wafford and controller and principal accounting officer Steve Whaley had also left the company as of Dec. 31. The federal filing was a required technicality, a Penney spokeswoman said. While they did resign from J.C. Penney, the filing didn’t explain that they were being kept on by the department store chain’s new owners.
The new owners have reincorporated the part of the company that is still working through the bankruptcy process as the Old Copper Co.
The “sole remaining officers” of Old Copper, which is completing the sale of real estate to Penney’s lenders as part of the reorganization, are Alan Carr, chief restructuring officer and Steven Panagos, secretary, according to a filing late Friday. Carr and Panagos were brought in as independent directors in July, during the bankruptcy.
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