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Penney’s Names Castagna, Hicks In Reorganization

NEW YORK — Reorganizing its top management, J.C. Penney elevated Vanessa Castagna to chairman and chief executive of Penney’s stores, catalog and Internet, and appointed a new president and chief operating officer of stores and merchandise...

NEW YORK — Reorganizing its top management, J.C. Penney elevated Vanessa Castagna to chairman and chief executive of Penney’s stores, catalog and Internet, and appointed a new president and chief operating officer of stores and merchandise operations, Kenneth Hicks.

Castagna, who was president and chief operating officer, remains second-in-command at Penney’s department stores and direct-to-consumer businesses, behind Allen Questrom, chairman and ceo of J.C. Penney Co. Inc., who announced the changes on Thursday. Hicks will report to Castagna.

The changes reflect Castagna’s shifting priorities, to primarily topline concerns. Castagna will oversee the merchandising and marketing, where Penney’s can use a lift, while relinquishing her role as chief operating officer.

For a while, Penney’s had a search on for a chief merchant, but instead opted for Castagna to fill the role. Castagna also continues to hold the title of executive vice president of the corporation.

Castagna will have fewer senior executives directly reporting to her now —merchandising, marketing, catalog and Internet, quality and sourcing units, as well as Hicks. Before, the group reporting to her included stores, planning and allocation, supply chain, store environment, product development and sourcing, and human resources for the stores.

Instead of six merchandise senior vice presidents reporting to Castagna, the structure has been simplified by creating an executive vice president level. Those senior vice presidents promoted to executive vice president are Liz Sweeney, women’s apparel, who adds accessories to her responsibilities; Charles Chinni, home, who adds shoes and fine jewelry, and Bill Cappiello, men’s and children’s.

Other new executive vice presidents are John Irvin, of J.C. Penney direct; John Budd, marketing, and Mike Taxter, for stores. Taxter reports to Hicks.

Hicks was previously president of Payless Shoe Source, and before that a senior executive and general merchandise manager at Home Shopping Network and May Department Stores Co. He was also a senior official at McKinsey and Co. consulting.

Areas reporting to Hicks at Penney’s include planning and allocation, supply chain and store environment.

In its announcement, Penney’s chose to put the focus on welcoming Hicks. “Ken is the really big news,” Castagna said. “He’s a new person into the stores, and this does free me up to really focus on merchandise, marketing and brand development — the content of which Penney’s is all about.”

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Others acknowledged Castagna’s achievements. “This is a reflection of Vanessa assuming a leadership role in the new J.C. Penney, and a reward for her accomplishments,” said Arnold Aronson, managing director of retail strategies at Kurt Salmon Associates.

“She’s been doing the heavy lifting at Penney’s,” said another source, referring to the centralization of merchandising, stripping store managers of buying powers, and the polishing of store presentations. “A lot of people couldn’t have done what she did. Sometimes, it was rough.”

Whereas Questrom is credited with the strategic framework, raising standards and bringing in new management, under his guidance Castagna has been instrumental in executing partnerships with major vendors, putting the emphasis on classifications and items, creating destination points called “hot spots” in the stores, and pulling Penney’s new team of merchants together.

“Now she is in a position to spend all of her time driving the business. The only way to real success is increased topline,” Aronson added. “Without same-store sales growth, there is not much of a future. Penney’s has never been a bad operator — it’s known for logistics and information technology. The biggest problem has been compelling product propositions.”

Castagna joined Penney’s as executive vice president and chief operating officer of J.C. Penney Stores, merchandising and catalog, in August 1999. Her appointment marked a departure from Penney’s usual practice of promoting from within its own ranks, and sent a signal that the retailer was aggressive about fixing its women’s business and ready to battle back against value-driven retailers and market share winners such as Kohl’s and Target, and the promotional onslaught at higher-end department stores.

Castagna was general merchandise manager of women’s and a senior vice president at Wal-Mart, where she was instrumental in getting the mass chain to clean up its soft lines, injecting some style in a women’s department long dominated by dowdy commodity items, raise product quality, add some fashion flair to the basic items Wal-Mart emphasizes, and make sizing consistent across brands.

Castagna also continues to hold the title of executive vice president of the corporation.

Castagna will have fewer senior executives directly reporting to her now —merchandising, marketing, catalog and Internet, quality and sourcing units, as well as Hicks. Before, the group reporting to her included stores, planning and allocation, supply chain, store environment, product development and sourcing, and human resources for the stores.

Instead of six merchandise senior vice presidents reporting to Castagna, the structure has been simplified by creating an executive vice president level. Those senior vice presidents promoted to executive vice president are Liz Sweeney, women’s apparel, who adds accessories to her duties; Charles Chinni, home, who adds shoes and fine jewelry, and Bill Cappiello, men’s and children’s.

Other new executive vice presidents are John Irvin, of J.C. Penney direct; John Budd, marketing, and Mike Taxter, for stores. Taxter reports to Hicks.

Hicks was previously president of Payless Shoe Source, and before that a senior executive and general merchandise manager at Home Shopping Network and May Department Stores Co. He was also a senior official at McKinsey and Co. consulting.

Areas reporting to Hicks at Penney’s include planning and allocation, supply chain and store environment.

In its announcement, Penney’s chose to put the focus on welcoming Hicks. “Ken is the really big news,” Castagna said. “He’s a new person into the stores, and this does free me up to really focus on merchandise, marketing and brand development — the content of which Penney’s is all about.”

“She’s been doing the heavy lifting at Penney’s,” said a source, referring to the centralization of merchandising, stripping store managers of buying powers, and the polishing of store presentations. “A lot of people couldn’t have done what she did. Sometimes, it was rough.”

Whereas Questrom is credited with the strategic framework, raising standards and bringing in new management, under his guidance Castagna has been instrumental in executing partnerships with major vendors, putting the emphasis on classifications and items, creating destination points called “hot spots” in the stores, and pulling Penney’s new team of merchants together.

“Now she is in a position to spend all of her time driving the business,” said Arnold Aronson, managing director of retail strategies at Kurt Salmon Associates. “Without same-store sales growth, there is not much of a future. Penney’s has never been a bad operator — it’s known for logistics and information technology. The biggest problem has been compelling product propositions.”

Castagna joined Penney’s as executive vice president and chief operating officer of J.C. Penney Stores, merchandising and catalog, in August 1999.

Previously, Castagna was Wal-Mart’s top women’s merchant.