The mammoth launch of Joe Fresh shops inside 681 J.C. Penney stores simultaneously Friday is taking on greater significance than either party would have imagined last July when the deal was struck.
Not simply because it’s Penney’s highest profile and hippest brand launch since the department store’s reinvention began in 2011. It’s also because after steep losses and scaring shoppers off with radical pricing changes, Penney’s seriously needs a winner and something to validate the controversial modernization strategy being implemented by J.C. Penney Co. Inc. chief executive officer Ron Johnson. He’s been dogged by rumors of a possible resignation, which were denied by the company Tuesday.
“We are one of many new concepts being brought to J.C. Penney. But there is no question about it: There seems to be a bit more focus on our brand working,” Joe Mimran, the founder of Joe Fresh, told WWD on Tuesday.
Right now, all eyes are on Joe Fresh as a critical step in Penney’s quest to capture a younger audience and maybe convert some traditional shoppers to modern styles. Recent smaller launches such as Pearl by Georgina Chapman of Marchesa and L’Amour Nanette Lepore have the same objectives. But establishing a new base of customers can take years and Penney’s may not have enough time. There are concerns the money is running out due to the reinvention costs and sales slide resulting from the new strategy, and that business must pick up soon.
“This quarter is going to look interesting for Penney’s. Sales have to be better to balance off the expenditures of the shops,” observed Michael Tersigni of Tersigni Palachek design collective, who formerly did store design and rollouts for Old Navy, Ermenegildo Zegna, Disney and Banana Republic.
Mimran, when asked if he was worried about Penney’s huge losses and getting paid, replied: “It’s not a concern to us at this point. When you are in the midst of a launch you put everything aside. Penney’s ended the year with a good amount of cash and still has credit facilities they have not drawn upon. We will see how this unfolds. You are going to get a read almost immediately in terms of the acceptance of our product.”
He urged patience on judging Penney’s reinvention. “These are very early days for a transformation of this size. You can’t expect the consumer to turn on a dime. It takes time.”
On the brighter side, Penney’s sales comparisons will be easy this year considering last year’s sharp declines, and Joe Fresh products on jcp.com show signs of helping the cause. Last week in a conference call, Johnson cited strong early results. Liz Claiborne was Penney’s top-performing online brand until Joe Fresh took the title after its launch on jcp.com during the Academy Awards on Feb. 24.
“We have seen seven times the visitors to Joe Fresh than to Liz Claiborne,” Johnson said. “Conversion of visitors to the Joe Fresh site is 10 percent higher than Liz Claiborne. Average retail is nearly 20 percent higher, and a full 61 percent of the buyers of Joe Fresh are first-time jcp.com customers. Interestingly, only 8 percent of sales are coming out of the New York metro area where Joe Fresh has stores and only 9 percent from California.”
“Fashion is what’s really selling out of the gate, fashion items like crochet shorts and a few dresses,” said Siiri Dougherty, Penney’s senior vice president and general merchandise manager of women’s apparel.
The mechanics of a national shop rollout are familiar for Penney’s. It’s been done with such brands as Liz Claiborne and Levi’s. “Execution is not the issue. Companies gear up to do these things,” observed Arnold Aronson, managing director of retail strategies at Kurt Salmon. “They have the same systems and procedures and a template with all of the instructions. It’s spec-ed out. The issue is how long is it going to take for brands they’ve brought in to make an impact. Penney’s may be pinning their hopes on too few actual brands like Joe Fresh. Remember, they’ve decreased their natural audience by 30 percent. Penney’s is at an inflexion point right now.”
Tersigni had a somewhat different point of view: “Getting that much product produced and delivered at the same time, particularly since it’s from overseas, has to be a huge challenge. Penney’s must have gone into production early.”
He stressed that shop construction and deliveries to stores have to be consistent; selling and visual teams must be educated about the product, and visual directives must go out, all to maintain the brand equity and standards door-to-door. “If the consistency isn’t there, the brand image gets diluted,” Tersigni said. Compared to the old Penney’s sea of racks presentation, “Now you’ve got individual brands that need to be expressed, which is exponentially more complicated to keep consistent.”
The story of how Joe Fresh and Penney’s came together began in February 2012 when Johnson sent Mimran a note, reading in part, “I love what you are doing. Let’s have coffee,” kicking off additional e-mails. “I put him on my invite list for our Fifth Avenue opening,” in March 2012, recalled Mimran. “Ron was good enough to drop by on his way back from London. One thing led to another. We started talking about possibilities. We met again in the store and hammered out the terms of the deal — in about an hour.” Lawyers took more time to formalize a four-year deal.
“We had a pretty tight timeline from the outset. We absolutely stuck to it,” Mimran said. Mid-February 2013 was Penney’s deadline for receiving goods in time for Friday’s launch, and 99 percent of all the orders were completed, Mimran said. Joe Fresh designed the samples, got the assortment produced and handled quality control.
Noting Joe Fresh already ships to 350 Loblaws in Canada, where the brand has 1.8 million square feet of space, Mimran said, “The quantities with Penney’s [which is unveiling 800,000 square feet of Joe Fresh shop space] weren’t the issue. It was really the tight timeline.” The Chinese New Year in February complicated matters because factories were closed. “It backed everything up quite heavily. We had to put in new processes for this relationship. We had to beef up our merchandising team, our quality control team and the sourcing and production. There was quite an addition of staff from a visual standpoint as well.”
Andrew Shannon, vice president of stores for Joe Fresh, has been hiring visual merchandisers out in the field, and assisting JCP to ensure the brand’s standards.
“The biggest thing was how quickly we decided to implement, from conception to opening the stores — just seven months,” Dougherty said. “We had to be very nimble and work closely with the Joe Fresh team.”
Joe Fresh shops at Penney’s will range from 1,000 to 2,500 square feet, necessitating 25 different layouts. “That in itself was a feat,” Shannon said. Each shop will debut with about 100 styles in different colors, adding up to more than 250 choices. The collection at Penney’s is women’s, no men’s wear is included, and shops are prominently situated by the front entrances. There are 12 vignettes per shop, on average, that for example would show a silk blouse in six different colors, paired with a pant, or a series of tops paired with a skirt. New goods will arrive every month, so at least a third of the shop will be different often. No product from Joe Fresh’s runway collection was purchased. Penney’s stuck to the moderate and low-priced items.
“The merchandise is really the star. It’s not so much about the decor. It’s basically white with orange highlights,” said Michael Fisher, chief creative officer at Penney’s, who formerly worked at Apple with Johnson.
“From the mannequins, to the signage, to the fixturing, to the density of product, all of that was vetted in great detail,” Mimran said. “It was very collaborative. One of the things they tweaked was our fixturing. We had it set right on the Street,” meaning Penney’s new aisle format running past all the shops. “Ron suggested why don’t we just push this back two feet. It was a small suggestion that made a difference,” helping differentiate Joe Fresh and give it some breathing room.
There was some hang up with the hangers. Penney’s wanted its standard black hangers; Joe Fresh disagreed. After some “very lively and colorful conversations,” Dougherty noted, Penney’s was convinced to modify, choosing a white hanger with a softer shoulder that’s different from any other in the store. “The expense was minimal, but we think it makes a big difference,” Fisher said.
There was also some tweaking to the collection, mostly related to weather. For example, Penney’s was seeking some summer styles earlier than Joe Fresh, being based in Toronto, would normally offer, and so a few long sleeves became short sleeves. Some deliveries on prints were accelerated as well.
A handbook for Penney’s stores was developed, specifying where the fixtures go, which colors should be together, where the tops and bottoms should be. Penney’s didn’t staff up for the launch, instead shifting responsibilities in the buying team and others. Penney’s selling associates continue to be roving, with none designated just for Joe Fresh.
Merchandise has been held in warehouses for at least three weeks and was shipped to stores last week, or about a week before the launch. Construction was usually completed a week before the launch date.
Penney’s clearly put Joe Fresh on its priority list with a strict deadline. “This one was really tight. Sometimes retailers drag their feet. But this was probably the most organized big-time rollout I have been involved with,” said Ralph Pucci of Ralph Pucci International, which took an order to supply 4,300 mannequins. “I’ve got a big stake in this. We worked round the clock and made sure we didn’t let up on other orders. We hired more people for sanding, spraying and packing.”
For Joe Fresh at Penney’s, Pucci created a variation of the headless mannequins he did for the brand’s freestanding stores in the U.S., adding a simple, abstract head and neck. “It’s sculptural, Brancusi-esque,” Pucci said. “Joe Mimran is very influenced by modern art.”
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews