In a surprising move, Ken C. Hicks has resigned as president and chief merchandising officer of J.C. Penney Co. Inc. to become president and chief executive officer of Foot Locker Inc., succeeding Matthew Serra.
Hicks has been a key figure in the reinvention of J.C. Penney and advancing the chain’s huge private label business. His decision to leave Penney’s is a blow to the business. Hicks was a strong candidate to succeed chairman and ceo Myron “Mike” Ullman and his departure leaves Penney’s with the difficult task of finding a replacement, considering the lack of talent in the industry. It also comes at a time when the business is struggling, along with most of retailing.
According to sources, the 56-year-old Hicks was eager to take on a ceo role, but didn’t want to wait for Ullman, 62, to retire. Ullman, who will assume Hicks’ responsibilities until a successor is found, is not expected to leave Penney’s anytime soon.
Hicks is highly regarded in retail circles. He’s considered a strong strategist, good with people and rounded as an executive, with extensive experience on the operational and merchandise sides of retailing.
“I am shocked and devastated to hear this news,” said Bisou Bisou designer Michele Bohbot, who creates a private label for Penney’s. “He’s a great man who did a beautiful job. He’s going to be greatly missed at J.C. Penney.”
Bud Konheim, president and ceo of Nicole Miller, which also designs a private label for Penney’s, praised Hicks for his ability to get along with people and for building a “terrific” management team. “The big thing is everyone likes Ken. He is a great guy and very funny. You don’t get into a conversation with Ken that goes, ‘Whoa, the economy.’ He gets you thinking about what you can do. Everything comes down to, ‘What is best for J.C. Penney?’ It has never been about what was good for him. He never had a favorite buyer, and a lot of stores do. The worst thing you can have is someone with a personal agenda — Ken never has.”
Konheim said he spoke with Hicks on Thursday. He said Hicks realized Foot Locker was the type of opportunity that would not necessarily be available 10 years from now and that he was young enough to take on a ceo challenge.
Hicks could not be reached for comment.
“Ken is a fair-minded fellow, not a Barack Obama-type speaker, but people trust him,” said one retailer who worked with him. “I believe he felt time was running out for him to get a ceo job. He didn’t want to wait for Mike Ullman to retire. I am amazed he hasn’t been plucked for a ceo job sooner.”
“What a surprise,” commented Marty Staff, ceo of JA Apparel Corp., whose Joe men’s wear line is launching exclusively at Penney’s for fall. “To my knowledge, he was revered and the logical successor” to Ullman. He lived J.C. Penney.”
Staff said Hicks had “assembled a universally strong team that was dedicated to his vision,” and he’s comfortable that the strategy Hicks and Ullman put in place will continue unabated. “He put his imprint on the company going forward,” Staff said.
He noted that, unlike most retailers at that level, Hicks “did everything. Most store presidents are operational or financial people. But Ken was also a product guy. He went through the Joe line piece by piece.”
Staff also said that although “Hicks was passionate about his job, he had a nice sense of balance. He would call me on a Saturday to ask a question and then tell me to go watch a football game.”
Hicks held his current position since 2005. He joined Penney’s in 2002 as president and chief operating officer of Penney’s stores and merchandise operations, after having served as president of Payless ShoeSource Inc., now known as Collective Brands Inc. He also worked at May Merchandising, served as executive assistant to David Farrell, the former May Co. ceo, and worked at McKinsey. Hicks is a graduate of West Point and holds an M.B.A. from Harvard Business School.
“Through Ken’s strong merchandising and marketing leadership, we have solidified our position in the hearts and minds of millions of customers across the country as the shopping destination for great style and quality at very affordable prices,” Ullman said in a statement.
Hicks, in his statement, said, “It has been a tremendous privilege to have worked with the great retail team at J.C. Penney to reclaim its leadership position within the industry. While I am very excited about my new opportunity, I am proud of the strong position that J.C. Penney is now in for its future success. It is rare that an opportunity to lead an international specialty retailer like Foot Locker arises.”
Serra, 64, has been Foot Locker’s ceo since March 2001 and chairman since February 2004. He also will retire from the board in January. Foot Locker, based in New York, operates 3,600 athletic retail stores in 21 countries.
“Ken is a strong merchant and a good general manager,” said Serra, who spelled out the challenge ahead for Hicks. “Over the past 10, 11 years, we have performed in the top quartile of the industry, the last two years being tough. But Ken understands the footwear business, though he will need to learn the nuances of the athletic industry and get the top line moving at the appropriate time. Right now, the mission is to keep the company in good financial condition, control the controllable — the inventory, the expenses and the margins — and get through the very challenging environment.”
Serra also cited the further rollout of stores in Europe, where Foot Locker operates 515 units and could operate 700. The $1 billion Europe division is performing “nicely,” Serra said.
He said it was unlikely that Hicks would bring in a new team to Foot Locker. “We have a very strong divisional and corporate management here. Ken is thoroughly aware of that.…I’ve had a good career. I think it’s time for me to retire. I have been here 11 years.”
With Hicks leaving Penney’s, speculation turned to possible successors, including several high-level executives from Macy’s Inc., a direct competitor to Penney’s. Among the names cited were Jeff Gennett, though he’s not likely to jump ship since he just started in his post as chief merchandising officer, a result of the Macy’s consolidation into a centralized chain. There was also speculation about Macy’s vice chairman, Susan Kronick, who is leaving the chain next year but is considered more of a store operations executive than a merchant. Other Macy’s executives mentioned included Bill McNamara.
Other potential candidates, observers said, include Jane Elfers, former Lord & Taylor ceo; Michael Balmuth, who runs Ross Stores; Frank Guzzetta, former Marshall Field’s ceo, now at Ralph Lauren, as well as Howard Socol, former Barneys New York ceo, who would likely insist on being the ceo at Penney’s or have the guarantee of becoming ceo soon.
“Penney’s is not going to be able to hire someone who is currently a ceo or has been a ceo, unless they were coming from a small company. More likely, they will tap a general merchandise manager,” said one executive who previously worked with Hicks.