J.C. Penney said Tuesday that Jill Soltau, the former CEO of Joann Stores, will take the helm of the struggling department store chain, sending shares up more than 10 percent in extended trading.
Soltau will fill the position Oct. 15 and will also become a member of the retailer's board of directors. The news comes after the departure of Marvin Ellison, who now serves as CEO of home improvement retailer Lowe's. Penney has been searching for Ellison's replacement since he abruptly announced his exit in May. The department store chain also lost its CFO, Jeffrey Davis, earlier this week.
Penney's shares rose more than 10 percent in after-hours trading to $1.73.
While the department store sector in the U.S. is under increasing pressure as shoppers' purchases shift online, Penney has struggled more than some of its peers, including Macy's and Nordstrom. In the latest quarter ended Aug. 4, Penney lowered its outlook for the full year, as it continued to grapple with an overhang of too much inventory.
The hope, now, is that Soltau will be able to help turn things around.
"Jill stood out from the start among an incredibly strong slate of candidates," Paul Brown, Penney board director and chairman of the CEO search committee, said in prepared remarks.
"As we looked for the right person to lead this iconic company, we wanted someone with rich apparel and merchandising experience and found Jill to be an ideal fit," Brown said.
Soltau comes to Penney at a crucial time — ahead of the all-important holiday season. The company has had a hard time keeping inventory levels low, as unsold and outdated merchandise has piled up in stores. When Ellison left, the retailer's board assured shareholders it would find someone with merchandise experience to fill the CEO role.
"I am highly passionate about the customer and I spent my entire career focused on the needs of a value-based consumer by researching, understanding and meeting her expectations for style, quality and inspiration," Soltau said in a statement about her new job.
Penney shares have fallen more than 50 percent this year to trade around $1.70. The retailer has a market cap of about $491.2 million.