June 25 (Bloomberg) -- Foot Locker Inc., the operator of 3,600 shoe stores, hired J.C. Penney Co. executive Ken Hicks as president and chief executive officer to replace Matthew Serra, who is retiring.

Hicks, who has been president and chief merchandising officer at J.C. Penney since 2005, will step down July 6 and start as Foot Locker CEO Aug. 17, the companies said today in separate statements. Hicks, 56, joined J.C. Penney in 2002 and formerly worked at Payless ShoeSource Inc.

Hicks worked to improve customer service and helped make women’s clothing a top-selling category at J.C. Penney. He wasn’t available for comment, said Quinton Crenshaw, a J.C. Penney spokesman.

Earnings have slumped at J.C. Penney as consumers curbed non-essential spending at the company’s 1,100 U.S. locations during the recession. Foot Locker boosted profit to $31 million in the quarter ended May 2 from $3 million a year ago as the company slashed costs to counter slowing sales.

Serra, 64, has spent 8 of his 11 years at Foot Locker as CEO, the New York-based company said in its statement. He will remain chairman until he retires Jan. 30, 2010, it said. Hicks will join the Foot Locker board, the company said.

Foot Locker rose 1 cent to $10.45 at 4:15 p.m. in New York Stock Exchange composite trading, giving it a market value of about $1.63 billion. The shares have gained 42 percent this year.

Plano, Texas-based J.C. Penney, the third-largest U.S. department-store chain, rose $1.60, or 6 percent, to $28.20 today. Its shares have gained 43 percent this year. The company has a market value of $6.65 billion.

To contact the reporter on this story: Sarah Rabil in New York at srabil@bloomberg.net

Last Updated: June 25, 2009 18:55 EDT