J.C. Penney Co. Inc.’s reinvention is pinching the vendor community.
Both The Jones Group Inc. and Iconix Brand Group Inc. on Wednesday posted first-quarter results that reflected lower sales due in part to Penney’s makeover. The shortfall led to a dive in both companies’ share price, even as Penney’s shares rose. Shares of Iconix dropped 14.6 percent to close at $14.53 Wednesday in over-the-counter-trading. Shares of Jones fell 8.1 percent to close at $11.25 in trading Wednesday on the New York Stock Exchange.
Penney’s shares were one of the best performers of the day, gaining 5.5 percent to $35.66.
Wesley R. Card, chief executive officer of Jones, said on the morning call to Wall Street analysts that Penney’s has dropped the firm’s Gloria Vanderbilt and Easy Spirit brands.
“We are working on several initiatives with Penney’s [that] we haven’t announced yet, and are still sorting out a couple of other brands,” Card added.
As for the loss of the two brands at Penney’s doors, Card explained, “The [retail] customers that are up against those doors of J.C. Penney are seeing an acceleration in both of those brands, and I think that’s a really good sign for the strength of those brands. So we’re fueling some of the loss in volume into the other channels around J.C. Penney.”
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