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Penney’s Floorplan: Accessories First, Cosmetics Second

NEW YORK — J.C. Penney is moving in on categories where it thinks its competition falls short.<br><br>While Saks Fifth Avenue, Neiman Marcus, even the single-unit Henri Bendel have built up accessories and jewelry, it hasn’t really been...

NEW YORK — J.C. Penney is moving in on categories where it thinks its competition falls short.

While Saks Fifth Avenue, Neiman Marcus, even the single-unit Henri Bendel have built up accessories and jewelry, it hasn’t really been happening to the same degree at the likes of Kohl’s and Sears, Roebuck & Co.

So Penney’s will expand and upgrade its women’s accessories assortment at the expense of most of its traditional color and treatment lines, including the experimental Becoming brand from Avon, which was in 89 stores. An enhanced accessories presentation, the company said Friday, will be in stores by Aug. 1.

“We’ve seen a strong increase in the sale of accessories, especially in handbags, belts and fashion jewelry, but there’s still tremendous opportunity for growth,” said Vanessa Castagna, Penney’s chairman and chief executive of stores, catalog and Internet, in a statement.

Penney’s has said it generated about $300 million in cosmetic sales annually.

The accessories buildup comes at a time when the category has already done well across the retail price spectrum, while most other fashion categories lagged due to a lack of newness. Last holiday season, accessories — which carry higher margins and are often impulse purchases — were a bright spot for stores, sparked by design innovation.

Contemporary sportswear was another bright spot, but it’s really only been a respectable business at higher-priced stores. Nevertheless, Penney’s, attempting to further differentiate from its most direct competition, is pursuing sexier, trendier looks via exclusive contemporary ready-to-wear offerings, at moderate prices, such as its Bisou Bisou collection, bowing this month.

On the accessories side, Penney’s will build up assortments of handbags, belts and fashion jewelry by seizing much of the space that has been held by beauty brands. A significant product expansion will occur in accessories at popular prices under proprietary brand labels, such as Worthington and St. John’s Bay, as well as contemporary brands like Mixit and Bisou Bisou, at moderate prices. Mixit will be expanded with fashion jewelry including silver pendants, bracelets and earrings. Seasonal offerings like sunglasses, cold weather items and slide footwear will also be increased.

Other non-private label accessories and jewelry brands that Penney’s sells include Monet, Napier, Crazy Horse and Relic.

Penney’s has already made some progress in fine jewelry in the past year, with a more cohesive and alluring presentation under the direction of Beryl Raff, formerly of Zale Corp. For example, in jewelry, Penney’s has added more bridal and pearl offerings. Most of Penney’s jewelry is made with 10-karat or 14-karat gold and the styling focuses on classic looks, rather than trendy ones. There’s also a key-item focus, and a fuller range of prices, especially in diamonds. Raff edited out what wasn’t working and filled inholes in the inventory so that each merchandising group, such as sapphires, presented a planned assortment of stylesand prices. The cases, which had been lined in gray, are nowlined in white, to brighten the selling floor.

In fragrances, national brands such as Chanel and Liz Claiborne will continue to be sold, and offerings for the young contemporary customer, such as the Forever Elizabeth and Celine Dion fragrances, will be introduced. Penney’s will also expand its presentation of the Liz Claiborne, Chanel and Red Door scents.

Treatment brands eb5 and Dermablend, along with customers’ favorite cosmetic color kits and gift sets, will still be offered.

While Penney’s said it was discontinuing Becoming, Avon had a somewhat different take on the action. According to Steve Bock, Avon’s president of retail services, “Our future was much more secure and better controlled to allow [beauty advisors] to sell [Becoming]. And, given our very good relationship with Penney, we informed them that this is our best decision…and they came to the conclusion thatthey would have to decide how they would restructure the core of the [cosmetics] department.”

Avon will sell Becoming direct to customers utilizing its team of 35,000 beauty advisers in the spring. Andrea Jung, ceo for Avon, explained that while Becoming had been tailored for a retail format, “the brand and its innovation we feel will do well in the core channel.”

However, according to Steve DiAntonio, chairman of Chantilly, Va.-based Color Me Beautiful, maker of the Iman, Flori Roberts and Fashion Fair cosmetics brands Penney’s has sold for 16 years, the decision to get out of cosmetics would have been made with or without Avon. “In my opinion, [getting out of cosmetics] was based on a strategy, as opposed to one supplier,” he said.

A Penney’s spokeswoman said that Becoming’s 1 1/2-year presence at certain Penney’s stores was a test, and that plans to convert the space for additional accessories is a response to customers. “They realize they can change their whole look based on their accessories.”

Penney’s used Becoming to test open-sell merchandising in its beauty departments in August 2001. In these stores, Penney’s took Ultima II, Iman, Flori Roberts, The Professionals, Charles of the Ritz, Dermablend, Fashion Fair and eb5 out from behind counters.

With Penney’s rearranging its selling floors, some suppliers will suffer. Revlon, the maker of Ultima II, could be the hardest hit. Ultima II was distributed in 435 Penney’s stores. Revlon had no comment. The Iman line from Color Me Beautiful was sold in 280 stores and Flori Roberts and Fashion Fair were each sold in 50 stores. However, the Color Me Beautiful bath and body business with Penney’s will continue.