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Brands Key to J.C. Penney’s Growth Strategy

Retailer looks to increase sales by focusing on accessories and jewelry in its “center core” and accelerating rollout of branded shop-in-shops.

PLANO, Tex. — J.C. Penney Co. Inc. thinks it can increase sales by focusing on accessories and jewelry in its stores’ “center core” and accelerating its rollout of branded shop-in-shops, said Myron “Mike” Ullman 3rd, president and chief executive officer, during the company’s annual meeting Friday at its headquarters here.

This story first appeared in the May 23, 2011 issue of WWD.  Subscribe Today.

“By enhancing the sense of discovery in our central core, there is a substantial upside, including increasing sales-per-square-foot and reinforcing J.C. Penney as a style destination,” he said.

Call It Spring fashion footwear by Aldo Group and MNG by Mango boutiques will both extend to 500 doors by fall, Ullman said, up from 100 and 292, respectively. Sephora, with 254 locations now, will be in 305 stores by the end of January. Call It Spring and Sephora are both generating sales-per-square-foot about three times the company average of $210, a spokeswoman noted.

In addition, the chain’s spring rollout of licensed Modern Bride jewelry collections to all 1,068 stores has spurred “strong gains” in the bridal business, Ullman noted.

He touted the company’s style and image transformation in 2010, epitomized by improved fashion offerings, the “Who knew?” ad campaign and a new streamlined logo.

The September launch of Liz Claiborne as an exclusive brand has exceeded expectations and continues to attract new shoppers, he noted. It also brought new items to Penney’s such as linen shirts, a fabric the retailer had virtually never carried, said Liz Sweeney, executive vice president and general merchandise manager of women’s, after the meeting.

“We’re very happy with Liz Claiborne, and it’s not just apparel — we’re very happy with handbags, fashion accessories, fashion jewelry and men’s as well,” she said.

Penney launched the brand with sportswear and has had a good reaction to the addition of dresses and swimwear this spring, she pointed out.

She sees Penney’s shoppers embracing seasonless dressing, items and faster fashion.

“I see them adapting new styles quickly, like the peasant top this spring — we sold it at the same time the higher-end stores sold it and to all ages,” she observed.

Penney’s is also growing its business with slimmer, modern-fit men’s clothing and shirts, said Steven Lawrence, executive vice president and general merchandise manager of men’s wear.

“Slim-fit dress shirts might be upwards of 30 or 40 percent of the assortment now, and [slimmer] tailored clothing might be 30 to 40 percent, where it used to be less than 10” percent of the clothing assortment, Lawrence noted.

The Find More touch-screen stands that facilitate online shopping are working in 100 stores, but rather than roll them out, Penney’s is tinkering with different digital formats for various departments. It’s currently running an experiment in about 20 stores to see whether iPads might be helpful tools for fine jewelry salespeople.