UPDATE 2-JC Penney president resigns to be Foot Locker CEO

Thu Jun 25, 2009 6:03pm EDT

Related Topics

* Ken Hicks resigns as president, CMO of J.C. Penney

* Hicks to become Foot Locker CEO effective Aug 17 (Adds byline, analyst comment)

By Nicole Maestri

SAN FRANCISCO, June 25 (Reuters) - J.C. Penney Co Inc (JCP.N) said on Thursday that its president and chief merchandising officer, Ken Hicks, has resigned, and he will become the president and chief executive officer of athletic-shoe retailer Foot Locker Inc (FL.N).

Hicks, 56, will take on his new role on Aug. 17, when he will succeed Matthew Serra, who has been Foot Locker's chief executive officer since March of 2001. Serra, 64, will continue as Foot Locker's chairman until he retires on Jan. 30, 2010.

"It is rare that an opportunity to lead an international specialty retailer like Foot Locker Inc arises," Hicks said in a statement.

Hicks, the former president of Payless ShoeSource Inc, joined Penney in 2002, and held the position of president and chief merchandising officer since 2005.

He worked closely with the department store operator's CEO Myron "Mike" Ullman to run the retailer's business.

"When Ken Hicks was appointed president, supposedly a cheer went up in the executive suite because he was so well regarded," said Gilford Securities analyst Bernard Sosnick.

Sosnick said he was surprised to hear of Hicks departure from the retailer. Penney is losing its chief merchandising officer as it tries to revive sales amid a deep recession that has cut shopper demand for its discretionary goods, like home decor and jewelry.

Penney said it will conduct an executive search to find a successor for Hicks. In the interim, Ullman will assume his responsibilities.

Hicks is joining Foot Locker as the retailer, which operates roughly 3,600 stores around the world, also contends with sluggish sales as shoppers cut back on shoe purchases in the weak economy.

To lure shoppers to its stores, it has tried to strike deals to sell exclusive name-brand merchandise in its stores -- a strategy that has also been followed at Penney.

John Horan, publisher of the Sporting Goods Intelligence, said that in this climate, many retailers are looking to hire executives, like Hicks, who are good merchants as opposed to simply good operators.

"When you get into a business as highly brand driven (as this)," he said. "You really need someone who is a merchant."

Serra joined Foot Locker in 1998 as President and Chief Executive Officer of Foot Locker Worldwide. He became president and CEO in 2001, and chairman of the board in 2004. (Reporting by Nicole Maestri; additional reporting by Alexandria Sage; Editing by Phil Berlowitz, Bernard Orr)

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