Struggling J.C. Penney hires marketing chief

J.C. Penney hired a Kraft Foods executive as its marketing chief to help the beleaguered brand win back customers it lost after a failed strategy of eliminating frequent sales on its merchandise.

Shares fell 2% Monday to about $14.

Debra Berman was named Penney's senior vice president of marketing, effective Aug. 2. She will join the company's executive board and report directly to CEO Mike Ullman III.

She "is an enormously talented marketing executive, and her desire to join the J.C. Penney team is a testament to our brand and its potential," Ullman said in a statement. "Her broad experience and success as a marketing strategist for major consumer brands make her the ideal leader to help us continue to reconnect with our core customer."

Announcement of the hire follows a published report July 31 that key commercial lender CIT had stopped supporting smaller manufacturers' shipments to Penney's due to credit concerns. The stock plunged 10% the day of the report.

It regained nearly all of the decline the following day after Penney said the report in the New York Post wasn't true.

Penney "continues to have the support of all of its key vendors, who have maintained their shipments to the company," the company said in a statement Aug. 1. The company said it has "ample liquidity to manage its business" and it expects to close the quarter with about $1.5 billion in cash on its balance sheet, J.C. Penney's statement said.

The 17 stock analysts tracked by Interactive Data are evenly split on Penney's stock, which has been falling in a year when stocks across the board have been rising. Five analysts have a buy on the stock, up from three just two months.

Five recommend selling the stock, unchanged from May, and seven analysts have a hold rating on J.C. Penney, down from nine two months ago, suggesting upside potential in the battered stock and some confidence the veteran retailer will bounce back from its current woes.

Before joining Kraft in 2009, Berman spent nearly five years as strategic planning director at DDB Advertising. She was VP of marketing strategy and directed global brand strategy for all Kraft-owned brands, such as Grape-Nuts, Fig Newtons, Triscuits, Jello-O and Maxwell House, among dozens of others.

Berman is the latest addition to Ullman's management team. He returned to Penney's in April after the board forced out former CEO Ron Johnson, whose new strategy included eliminating frequent sales. That approach, abandoned in recent months, led to mass customer defection and financial losses.

"There is huge opportunity to remind America's families why it is so great to shop at J.C. Penney while attracting new customers to the brand," Berman said. "This can be achieved through targeted campaigns that creatively highlight our unique and authentic combination of style, quality and value."