PLANO, Tex. — Myron E. "Mike" Ullman 3rd, chairman and chief executive officer of J.C. Penney Co. Inc., told shareholders Friday the retailer was positioned to cope with the economic downturn — a day after Penney's reported first-quarter net profits fell 49.6 percent to $120 million.
"We had the second-best year in our company history in 2007 despite the challenging economic environment, and we are looking ahead to navigate the choppy waters with a proactive plan to continue gaining market share and reaching more consumers," Ullman said at the annual meeting.
Penney's plans to continue rolling out Sephora units in many of its new and renovated stores, Ullman said, without providing specifics. There are 72 in-store shops generating sales as much as two-and-a-half times stronger than merchandise previously sold in the footprint taken up by Sephora, he added.
Ullman described the $1.5 billion Web site, jcp.com, which grew 15 percent in April, as the hub of Penney's business.
He said the 1,074-unit chain is in a niche between Macy's and Target, allowing Penney's to reach both midtier fashion shoppers as well as those interested in more commodity-priced merchandise.
"We are financially sound and have as much flexibility as any time in the company's history," Ullman said. He was referring to the $19.9 billion retailer's cash reserves of almost $2 billion and savings of about $200 million in capital expenditures by scaling back store openings this year to 36 from 50 and planning 20 major store renovations, down from 65.
Ullman said Penney's could leverage its financial flexibility to cushion itself and be ready to expand again when the economy improves.
However, with a recovery possibly a few years away, Penney's is implementing a pragmatic agenda called the Bridge Plan, which Ullman said is focused on balancing the chain's long-term opportunities with near-term pressures on the consumer, including the housing slowdown, rising gas and food prices, tight credit and job cuts.
The company has said it would cut future orders to align inventory with anticipated sales. Penney's also is launching initiatives, such as the Decree and Kimora Lee Simmons' Fabulosity junior lines, and a program to boost customer service. The chain's merchandise mix is now about 45 percent private brands and the rest a mix of exclusive and national brands.
Ullman said the higher priced American Living fashion and lifestyle collection, which is produced by Polo Ralph Lauren Corp.'s Global Brand Concepts, could reach sales of $1 billion in three to four years.
Over the past year, Penney's has hired 160 in-house designers to help ramp-up trend offerings and speed them to the stores more quickly.
Ullman has said Penney's women's apparel, representing more than half the store's offerings, has been a relatively robust part of the business. "We want to be more articulate about the prices, the fashion and the private and exclusive brand advantages that Penney's has to offer," Ullman said of Penney's advertising and marketing campaigns that play up synergies among its store, catalogue and Internet businesses.
The retailer's board also declared a quarterly dividend of 20 cents per share on the chain's common stock payable Aug. 1, to company stockholders of record at the close of business on July 10.
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)