By  on February 11, 2008

NEW YORK — The big guns have finally been fired. 

After a year of planning and preparation, American Living, the collaboration between J.C. Penney Co. and Polo Ralph Lauren Corp.’s Global Brand Concepts, is trickling into stores now and will have its full-blown launch in a media blitz that will begin on Feb. 19 in New York and culminate during the Academy Awards presentation on Feb. 24. 

The line, which marks the biggest brand introduction in the history of the 105-year-old Penney’s, spans 40 product categories across men’s, women’s, children’s, home, footwear and accessories, and is seen reaping in excess of $1 billion in annual sales within five years. The $20.1 billion Penney’s currently has several “power brands” that have sales in excess of $1 billion annually, including Arizona, St. John’s Bay and the J.C. Penney Home Collection. 

American Living will initially make its debut in just under 600 stores as well as online and in the company’s catalog within the next two weeks. It will be merchandised with “an old, country-store feel,” the company said, encompassing white, wooden fixtures and separate signage. In three test stores—Paramus, N.J., Montrose, Colo., and Glendale, Calif.—the line will get its own in-store shop, bringing all the categories of merchandise together in one place. Beginning in March, most new stores will sport the boutique concept. 

In other stores, the merchandise will be offered within “the parent department,” according to Lana Cain, executive vice-president and GMM of men’s. In the case of men’s, that means it will join the company’s other labels within the men’s area. 

“We’re really excited about this launch,” Cain said in an interview last week. “It’s truly a fit for J.C. Penney. It’s authentic Americana with a beautiful brand presentation. The quality is impeccable and it’s timeless, classic and traditional. The details and construction are aspirational and it will be a signature for us.”

In men’s, the offering will be comprehensive, ranging from the classic polo to suits, dress shirts, neckwear and khakis. A young men’s component will be offered in coming seasons. She said that “there’s wonderful core product,” such as “magnificent” solid, piqué polos, “and the dress shirts are fabulous. This will really raise the tide [of the men’s department].” 

Prices will be at the store’s “best” level and will include solid mesh polos for $45, classic, pinpoint, button-front dress shirts for $50, navy blazers for $275, nested suits for $425, swimwear for $45, neckwear for $38 and belts for $30. 

Because Penney’s is a promotional department store, American Living will also be incorporated into the company’s regular sale cadence, she said. “We worked through this with Global Brand Concepts. They want to do volume and it had to fit into the price points we get traction on.” 

Cain called it “smart pricing for this type of merchandise. It fills a space on our floors—it’s a little more polished, classic and traditional [than our other labels] but will complement our Izod, Concepts by Claiborne and Van Heusen product.” 

Cain said that in 215 of its biggest doors, Penney’s “created space [for American Living], so we did not have to vacate any brands. We lined the fixtures up in a linear way.” The only brand that was “exited” by the addition, she said, was Pierre Cardin, but this would have been the case anyway, given the retailer’s ongoing scrutiny of its mix each season. 

“We’re really proud of the men’s presentation,” she added. “It’s so iconic and gorgeous.” 

Some 40 million Americans are expected to be exposed to the product when the 30- and 60-second ads break during the Academy Awards. The marketing campaign, which was conceived and executed by Global Brand Concepts, will include an e-mail campaign, in-cinema advertising, direct mail, specialty catalogs and weekly circulars. The merchandise will be available online beginning on Feb. 19 and will have its own tab on that will take customers to the American Living “sitelet.” Cain noted: “There is unprecedented synergy across all our channels.” 

Additionally, store associates will wear red American Living polos, shopping bags will sport the logo, and the broadcast commercials will run on the stores’ point-of-sale terminals. 

The launch of American Living marks a new chapter for Polo Ralph Lauren Corp. The Global Brand Concepts division was established last January to develop exclusive non–Ralph Lauren merchandise for select retailers. Although the aesthetic of the American Living product is undeniably Ralph, the designer’s name and affiliation are nowhere to be found on the product. In a recent interview, the designer said customers “don’t have to know it’s Ralph Lauren. They just have to like it.” 

During its earnings call to analysts last week, Roger Farah, president and COO of Polo, said: “Simply put, we’re extremely proud of what we have developed for American Living.” 

A test of the merchandise at a store near Penney’s headquarters in Plano, Texas, has already resulted in “very strong selling of product at full price,” he noted. “So, it’s too early to call, but with 1 percent of the electoral votes in, we’re feeling encouraged.” 

Cain noted: “There’s not a man in America who doesn’t know or understand Polo, and we believe that only a division of Polo Ralph Lauren could make product like this.” 

Under the terms of the deal, Penney’s buys the product, Farah said, “so there’s no excess in the manufacturing process. Once it’s been shipped, the merchandise is theirs and they’re responsible for sell-throughs and clearance.” 

Like many other retailers, Penney’s has experienced a drop-off in sales as consumers scale back their spending. Same-store sales fell 1.9 percent in January after a 7.5 percent decrease in December. The company said February comps at the department stores are expected to be down in the low-single digits. It is calling for fourth-quarter earnings to be at the high end of its original guidance range of $1.65 to $1.80 per share.

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