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J.C. Penney wants what Fred Segal and Melrose Place have — some “California cool.”

This story first appeared in the October 14, 2008 issue of WWD.  Subscribe Today.

For the $19.5 billion chain with a broad, middle-market appeal driven by mostly safe, traditional fashion, it’s generally been challenging to present a hip, trend-driven image and attract younger customers. Nevertheless, Penney’s has called upon the Los Angeles-based A.B.S and its co-owner, founder and design director, Allen B. Schwartz, to create a dress and sportswear collection that puts a faster fashion spin on the business. Or, as Penney’s executives tend to say, fills that “white space” in the offering.

The upcoming women’s line, called Allen B., will be sold exclusively this spring at 600 of Penney’s 1,093 stores, online at jcp.com and via catalogue. The 600 are Penney’s largest stores. The approach is to provide novelty; details such as ruffles and drawstrings; vivid colors; silhouettes that flatter feminine curves; items like tie-dyed knit tops, jumpsuits, dresses and tops with Grecian draping, and prints, and to project the California lifestyle, without being too beachy or too Beverly Hills flashy.

“Allen B. delivers an array of designs that are ageless, seasonless and make looking great effortless,” said Ken Hicks, J.C. Penney Co. Inc. president and chief merchandising officer. Hicks said the line is consistent with Penney’s strategy to offer “smart prices,” with Allen B. ranging from $30 T-shirts to $72 jackets, and day, cocktail and evening dresses priced from $70 to $80. The line also includes knits and wovens, jeans, skirts and shorts. Schwartz designs the collection and Penney’s sources it.

Schwartz, the co-founder of Esprit de Corp. and founder of A.B.S by Allen Schwartz, has a reputation for seizing upon trends and being quick to bring them to market. While Penney’s considers him “the master of trend,” years ago he was considered the master of knockoffs. After the European designer shows, A.B.S interpretations a few weeks later would appear in the windows of Bloomingdale’s and other stores, long before the actual collections were sold in the stores.

“Those days are way, way over,” said Schwartz in an interview. “Today, the runway means nothing. All the fashion for the casual California chic look is coming out of L.A.”

The collection also reflects what Penney’s has been increasingly banking on — developing exclusive lines with designers and through its own product development arm. Over the last several years, lines formed from partnerships with Nicole Miller and Bisou Bisou have endured, and just last week, Penney’s disclosed a deal with Charlotte Ronson, who is designing a contemporary line called I [Heart] Ronson, which also will be introduced this spring. This year, Penney’s launched four new youth-oriented brands — Decree, Fabulosity, Le Tigre and White Tag, all sold exclusively at Penney’s. The retailer also this year launched American Living, an exclusive line from Polo Ralph Lauren Corp.’s Global Brand Concepts.

Schwartz said he signed a multiyear license with Penney’s, but didn’t specify. Discussions go back four years, when he said he was first approached by the retailer.

After the deal was signed, he said it took him six weeks to build the sample collection, and it will be about five months from starting the concept to the first delivery in February for spring 2009. Every two months there will be a new delivery, but certain styles will be introduced monthly. Penney’s has been looking to accelerate merchandise turns and has been successful shortening its product development cycle to as little as 15 weeks.

“Today, what is exploding is the antifit look, the crop look, the boy jean, ruffle blouses and the new harem pant. It’s very baggy, very ‘I Dream of Jeannie’ inspired,” Schwartz said when asked how he interprets California cool. “It’s a relaxed feeling. It’s a softer crotch, a softer seat, a paper bag waist. The feeling is very relaxed and comforting.”

Schwartz said Allen B. is his first exclusive branding venture, though he’s done a lot of product development on an individual basis. A.B.S is sold at the brand’s four freestanding stores, and at specialty and department stores including Bloomingdale’s, Nordstrom, Lord & Taylor and Saks Fifth Avenue. “I’m flattered and excited to bring our design culture to J.C. Penney and reach a broader audience,” said Schwartz.

And for them, “Allen B. will never lose its sense of wearability. This customer could be 16 to 65. Allen B. will bring the trends to them, but there has to be a sensibility to Penney’s, a wearability. This is no ego trip. This is about business. This is about bringing Penney’s newness in a fresh, wearable way. The only way you are going to reach a younger audience is by giving them some apparel that has some attitude and pop.

“This is not about runways or movies, or any egocentric [fashion] shows. This is all about what is coming out of L.A. In the last six years, that’s where all the casual inspiration has come from.”

Schwartz and Penney’s declined to project a specific volume, though it is believed the brand could realistically grow to several hundred million dollars in sales in a few years, possibly as much as $500 million.

The chain could use a lift, considering, like most retailers, that the economy has been dragging down the business. For the first half, Penney’s suffered a 43.6 percent decline in profits and a 3.8 percent drop in sales.

According to Elizabeth H. Sweney, Penney’s executive vice president of women’s, customers shop the store for either modern, traditional, conservative or trendy clothes. “These four lifestyles work for our customer. Trendy is our fastest bucket. It’s growing very fast. Allen B. is going to be in the trendy bucket. It’s fast, trend-driven fashion.”

She said the brand is geared for “hanging out and going out” and will target 25- to 34-year-old women. However, “We don’t talk about age as much. Any woman who has a trendy lifestyle can wear this. Today’s trends are part of their personal DNA. Even during tough economic times, they are not willing to sacrifice fashion.”

Sweney said there will be heavy marketing behind the brand, and that it will be displayed prominently and in a distinctive environment. “You will not miss it when you walk onto our floor,” she said.

Asked why it took so long to introduce the collection, considering talks go back several years, Sweney replied: “[Schwartz] said, ‘I am very contemporary. I don’t know if I am ready for you yet.’ But we kept in touch with him. He watched our store environment evolve, our marketing evolve, and Sephora blew him away….There was a struggle to get people to talk to us five or six years ago. But Penney’s is a very different place today. We are always talking to people. Not just talking but really understanding how something they have might fit into our assortment and voids we feel are in our assortment.

“The most important thing is they bring real authentic design to our customer and they bring tremendous passion for the product,” Sweney said.

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