Black Cloud on JCPenney

JCPenney has just lost its CFO Bill Wafford. He was their CFO for 2 years and he took the same responsibility at Thrasio. a start-up that sells popular brands on Amazon.com.

Wafford left his important post at a critical time. Since December 31, Stanley Shashoua has been the interim CEO when Jill Soltau, the former CEO, left the company. No CEO replacement has been appointed to move the company forward and develop a growth strategy.

Now the CFO is also gone. I believe that Wafford only found this new job because he was looking for interviews and actively looking for a new position. What prompted Wafford to take such a step? As CFO, he must have seen insurmountable problems? Did he conclude that JCPenney was going to fail? It was certainly not his salary that made him move, as he was making over $ 1 million a year with a base salary of $ 500,000.

Wafford joined JCPenney 2 years ago, after spending 2 years at Vitamin Shoppe

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. Previously, he had a 2 year term at KPMG as a partner after 5 years working at Walgreens.

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. He moved a lot.

Wafford was on the team when JCPenney filed for Chapter 11 bankruptcy on May 15, 2020 during the pandemic. During his tenure the company closed 154 stores and finally Simon Property Group

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and Brookfield Management acquired the company. It was certainly a relief, as many specialty store leases required the main stores to be open. Large tenants like JCPenney generate customer traffic in shopping malls through their promotional activities.

As JCPenney bumbles with the top two C positions open, I believe as an observer that candidates are unlikely to flock to company since there are uncertain times to come.

At the same time, Reuters reports that JCPenney has transferred its pension obligations to annuity provider Athene, thereby ensuring that JCPenney employees will continue to receive their benefits. Global management of Apollo

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a private equity firm that controls Athene, seeks to profit by earning a better return on the investment of pension assets than will be its payout to retirees.

By November 2020, the Pension Benefit Guarantee Corporation had taken responsibility for the JCPenney pension plan, but also allowed the retailer to explore alternatives that would avoid cuts in pension benefits. I am happy that retirees are protected no matter what happens to the company.