PENNEY'S HUTCHENS LOOKS FOR $2B IN 5 YEARS

Byline: Janet Ozzard

NEW YORK--Cost control, inventory control and constant innovation.
If put into practice, these three ideas could take J.C. Penney Co.'s denim bottoms business to $2 billion in this decade, according to Thomas D. Hutchens, president of worldwide merchandising.
Addressing a group of textile and manufacturing executives at a lunch sponsored by Jeanswear Communications here Tuesday, Hutchens gave a three-pronged speech that closed with a brief endorsement of Penney's phenomenally successful Original Arizona Jeans Co., which currently does over $500 million wholesale in three categories.
"How did we get to be the fastest growing private label brand? Our marketing was to raise perception of the brand gradually, in a way that most customers still don't realize that Arizona is only available in stores," Hutchens said.
Arizona also represents Penney's beliefs about the denim market in other ways, he said.
"We think the Arizona Jeans Co. and innovation are synonymous," he said, referring to his call for constant innovation. "Wash it, brush it, sandblast it--we have to keep innovation coming. The customer buys with the hands as much as the eyes."
In addition to innovation, he said, brands have to add value--and keep costs down.
"We all continue to see stresses in costs, but we know the customer will only pay a certain amount," said Hutchens. "We have to be able to produce products in the most efficient way despite rising costs. By asking the jeanswear industry to pinch every penny, we can look forward to maintaining and exceeding our current success. Otherwise, we're courting disaster."
And while Penney's utilizes electronic data interchange, Hutchens said, there still needs to be more innovation in the technology of replenishment.
"We need supply on demand," he said. "There has to be a better way--a system that doesn't ask anyone to hold inventory. This area desperately needs attention. We have all the technology in the world. We should make it work for us."

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