May 29, 2018
Ellison Has the Opportunity to Cement His Reputation
A few years back, Marvin Ellison was a candidate for the top spot at Home Depot. While he did very well running U.S. operations for Home Depot, Ellison didn’t get that gig, but he was tapped to lead struggling department store JCPenney. Now, four years later, Ellison will get another shot to build a legacy in the home improvement retail industry as he takes over at CEO of Lowe’s.
Taking over his former employer’s chief rival is a bit of a bittersweet move for Ellison, who spent about 12 years working at various executive positions at Home Depot. But he’s certainly pleased not to be tied to JC Penney at this juncture.
When he was hired, Ellison was considered to be the leading candidate to help JC Penney find a way to make it through the massive market shift happening in department store retail. As other companies were shuttering stores or closing down completely, JC Penney was trying to find a way to make something work.
Some things did work for the retailer, as Ellison offered idea after idea, including a renewed focus on customer service and shopping experience at the department store. But, in the end, it wasn’t quite enough to pull Penney’s out of its slump.
Meanwhile, over at Lowe’s, that company was also looking to make a change. Now former CEO Robert Niblock announced plans to retire, even as one of the company’s most vocal investors, D.E. Shaw called for more aggressive changes at the company.
With Niblock out, Lowe’s began looking for a new “face” to lead the company into the next phase of operations. They liked what they saw in Ellison, and he got the nod. The decision didn’t do much for Lowe’s stock price, initially, but JCPenney took a brutal hit at the news. The company’s price plummeted yet again, after already dropping 70 percent while Ellison was at the helm. Clearly, Wall Street does not believe the former CEO was to blame for the company’s woes.
The question people are wondering, now, is what to expect from Ellison. He had a lot of success in relatively lesser roles over the years at Home Depot, and most people saw him as a front runner for the top spot… Instead, he went to JC Penney, and that really didn’t work out for anyone. Now, though, Ellison is in charge, and Lowe’s is in a prime position to make a move.
With the shift in retail behavior and several big box brick-and-mortar retailers scaling back or closing down, the big-name home improvement stores have a tremendous opportunity. While other retailers are struggling, those stores remain busy… and competition between the orange and blue titans is fierce. Given Ellison’s insider knowledge of the competition and his drive to make a big impact, expectations at Lowe’s are very, very high. The table is set and the opportunity is there. The only question now, is what name will Mr. Ellison make for himself?