J.C. Penney further separated itself from the Ron Johnson era on Monday, when it announced that Home Depot's Marvin Ellison will become CEO-designee in November and officially take the reins in August 2015.
But Ellison's appointment isn't only significant in that it marks the start of a new chapter for the low-price department store, which spun into financial trouble and out of shoppers' minds under the control of former CEO Ron Johnson.
According to a report in Women's Wear Daily, he will also be one of only two African American CEOs in the retail industry, joining Sam's Club CEO Rosalind Brewer.
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WWD wrote that Penney's has a solid reputation for hiring workers across all backgrounds. This year, it ranked 48th for diversity among 1,215 companies studied by online magazine DiversityInc.
"Our commitment to inclusion and diversity is one of the core values on which we are rebuilding J.C. Penney," WWD quoted interim CEO Mike Ullman as telling the publication.
Penney's announcement came less than one week after its analyst day, when the department store's leadership gave no clear update on its succession plan.
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"J.C. Penney thought, wrongly, that no update on succession was okay seeing as the man who saved the company from death was to be at the helm," Belus Capital Advisors analyst Brian Sozzi, who has a "hold" rating on the retailer, wrote in a note to investors.
"With it laying out a three-year vision, from upgraded store environments to actual free cash flow, J.C. Penney could have saved a great deal of investor headache by giving a timetable on the CEO announcement."
Ullman, who previously served at the helm of the department store for seven years, returned to Penney's in April 2013 to reverse the downward spiral caused by Johnson's failed reinvention, which included doing away with coupons.
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Analysts commended Ellison's operational background at Home Depot, where he led the launch of its ship from store and buy online, pick up in store programs. Still, his lack of experience in apparel caused some to question whether he was the right selection.
"An operational expert from a hardlines retailer is not what we feel [J.C. Penney] needs," said Wells Fargo analyst Paul Lejuez, who has an "underperform" rating on the company. "He will need to figure out how to navigate an extremely promotional apparel and accessories environment, while also strengthening [J.C. Penney's] brand/value proposition in areas where it appears he has less experience."
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Ellison will receive a one-time cash signing bonus of $4.14 million. His annual base salary, to be reviewed annually by the board, was set at $1.3 million. He is also eligible for an annual performance-based bonus, which could reach as high as $3.9 million in 2015.
Penney's shares rose 5 percent to near $7.43 in morning trading.
To read the full story from Women's Wear Daily, click here.