PLANO, Tex. — Given J.C. Penney’s poor performance in the first quarter and the stock’s plunge to historic lows, chairman and chief executive officer Marvin Ellison emphasized Friday that the company is working to slash debt and boost revenues.“When investors look at the retail sector, companies with the highest debt tend to have the least confidence,” Ellison noted at the retailer's annual general meeting. “As we continue to pay down debt we continue to put ourselves in a better position, and that’s why we’re so focused on debt reduction.”Most of the proceeds from last year’s sale of the retailer's headquarters campus for $350 million will be used to pay down debt in 2017, he said.The firm also sold a distribution center in Buena Park, Calif., in March for more than $100 million. Last year, the company retired $675 million in debt, he said.J.C. Penney stock sank to $4.55 last week when first-quarter net losses widened to $180 million, or 58 cents a share, from $68 million, or 22 cents, the prior year. Sales slipped 3.7 percent to $2.7 billion from $2.8 billion, with comparable-store sales sagging 3.5 percent.Shares traded as low as $4.22 on Monday, but the price was up slightly to $4.54 on Friday.The apparel business has been especially tough, but Ellison sees opportunity in large sizes and activewear.Citing last year’s launch of the chain’s first plus-size brand, Boutique+, Ellison affirmed, “This is a very underserved customer that’s loyal to us, and…we can be number one in market share over the next couple of years.”Activewear, which he admitted the company was slow to pick up on, is now the best-performing category in apparel, driven by Nike shops and an expansion of Adidas for women, he said.Adidas is in 100 units and will be in 600 by year-end, a spokeswoman explained.Key revenue growth engines are the roll out of major appliance showrooms and the expansion of Sephora to 675 units by year-end, he noted.“We are rolling out 100 new appliance stores this month in time for the Memorial Day selling period, which happens to be one of the biggest appliance selling periods of the year,” he pointed out. “That will give us over 600 locations.”The addition of turnkey installation services for plumbing, heating and air conditioning in March was another strategic move, he said.“Over two-thirds of [American] homes are over 30 years old,” Ellison pointed out, noting that home improvement expenditures are projected to tally $300 billion this year. Three-quarters of J.C. Penney customers own their own homes, he said.“When Sears declines, they will give up market share in some of these categories, and we want to position ourselves to take advantage of that.”The company continues to add in-store pick up for online purchases, and 40 percent of its web sales are collected in a store.“In most cases, the cost of fulfillment is growing at a faster rate than the revenue of many e-commerce companies,” he said. “We think over the next 18 to 24 months, it’s going to become really critical to leverage your stores as a way to have convenient pickup for customers.”A dramatic improvement in the retailer’s mobile app will also help, he said.“We think the new door to the store will be the mobile app where people research what they’re going to buy and then come into the store,” Ellison noted.J.C. Penney’s added toys during the holidays, which proved to be one of the best-performing categories of the season, he said. As a result, the company will begin selling toys in all stores for back to school.“We did survey work and asked our customers what they bought elsewhere that they would buy from us, and the top two were toys and appliances,” he said. “So we’re listening to our customer a lot better, and we’re going to give them the things they want.”He maintained the firm’s financial guidance, which estimates that sales will rise or fall in the range of 1 percent with a 20 to 40 basis point improvement in gross margin and adjusted earnings per share in the range of 40 to 60 cents. Selling, general and administrative expenses are projected to drop 1 to 2 percent.
In honor the @CFDA’s announcement of @iamnaomicampbell receiving the Fashion Icon Award at the 2018 #CFDAAwards, which will take place on June 4, here’s a #tbt of the supermodel on @michaelkors’ runway in 1991. #wwdfashion #wwdarchive (📷: George Chinsee)
“I was making the guacamole when my scout saw me,” says model @stuckinteenage on being discovered just six months ago while working at @chipotlemexicangrill. Since then Williams has signed with @dnamodels, walked in her first show at @calvinklein and landed on the cover of @vogueitalia – a high point of any model’s career. To read @lisajlockwood’s full interview with the model on her experiences thus far, head to WWD.com – link in bio. (📷: George Chinsee)
“I love the idea of dialogue, period. It’s where I’ve always gotten my inspiration from: hearing other women speak, their journeys and their paths,” said @hereisgina, who delivered the keynote speech during @sxsw for @createcultivate in partnership with @fossil. For her two panels, Rodriguez chose female empowering, female-led and female entrepreneurs to focus on. Head to WWD.com to read more about her thoughts on Time’s Up, growing up in a family of women and why we “need a girls’ club.” #wwdeye #sxsw (📷: @jgreenery)
Leading luxury brand are shaking things up to keep up with streetwear. Case in point: the arrival of @mrkimjones as artistic director of @diorhomme. Jones, who succeeds @Kris_Van_Assche, is seen as one of the handful of designers who can actually straddle the luxury and streetwear worlds — which could lead to even more changes at established brands. What could this mean for the rest of the menswear landscape? Head to WWD.com to find out what experts predict #wwdfashion (📷: @franckmura)
“It’s like buying groceries. You’re going to buy the best mango, the best mozzarella, the best things. You have to, or others are going to take it all,” said @gabrielahearst on why she uses only the finest fabrics. Last week, Hearst received her first @cfda nomination for Womenswear Designer of the Year, and earlier this month she opened a permanent showroom in Paris. To read @jessiredale’s interview with the designer and find out why this is shaping up to be a big year for her, head to WWD.com. #wwdfashion (📷: @francoisgoize)
“It’s an interesting thing, playing a younger version of your mother. It’s an interesting concept. I adore my mom and love her in every capacity, but it was just something that had never crossed my mind,” says @anniemstarke on playing a young Joan Castleman in “The Wife.” The same role will be played by her mother Glenn Close. Read more about her growing up in the film industry as the daughter of producer John H. Starke and Close and what she has planned for the future #wwdeye (📷: @nataliamantini)
@asics is launching a new streetwear sneaker inspired by its latest ambassador, @steveaoki. The Hyper-Kenzen x Aoki, which will launch at @footlocker stores exclusively tomorrow, is a slip-on style that incorporates the brand’s proprietary Gel technology through beads integrated into the midsole for comfort and endurance. Read the full story on WWD.com.