J.C. Penney Co. Inc. is jumping on the resale bandwagon as part of a broader reinvention that is touching every part of the business — but has yet to stop the retailer’s decline in sales, which fell 9.2 percent in the second quarter.
After Macy’s Inc. unveiled a pilot Wednesday that brought ThredUp to 40 of its stores for back to school, Penney’s followed suit Thursday, revealing a similar partnership with the thrift store in 30 of its locations.
Starting this week, secondhand handbags and women’s fashion will be available in a branded ThredUp space in Penney’s stores in select markets.
Jill Soltau, who has led J.C. Penney as chief executive officer for less than a year, is in the midst of a very difficult turnaround that has the company working hard to better understand its shoppers.
“We will fully respond to what they want from us, what they need from us and just as importantly what they are giving us permission to be,” Soltau said on a conference call with analysts.
“Our new partnership with ThredUp, the world’s largest online consignment store featuring like-new styles from leading designers and brands, is a great example,” she said. “With the exponential growth in resale, there’s no doubt that demand for affordable luxury is at an all-time high. There is an emotional thrill that comes with finding a high-quality secondhand product for much less…We’re excited about the prospects of creating a new in-store experience that makes high-end brands attainable, as well as catering to eco-minded consumers who want more sustainable options in their wardrobe.”
The resale connection came as Penney’s published its second-quarter earnings. Its net loss narrowed to $48 million, or 15 cents per share in the quarter ended Aug. 3, compared with a net loss of $101 million, or 32 cents per share in the same period last year.
On an adjusted basis, the loss was 18 cents per share, an improvement from 38 cents a year earlier, and better than analysts’ expectations for a 31 cents loss, according to FactSet.
Investors zeroed in on net sales decreasing to $2.51 billion from $2.76 billion a year earlier and below the $2.64 billion FactSet consensus. Comparable sales fell 9 percent.
The company’s stock inched up to a shade above 58 cents in trading Thursday, leaving it with a market capitalization of $183.7 million.
Penney’s was previously warned that it could become delisted from the New York Stock Exchange if it doesn’t get back up. Soltau said the company has “every intention of increasing our share price to above $1 through the improvements in our operating performance or, if necessary, via other remedies available to us.” That could include a reverse stock split.
But clearly, that’s just one of the moving parts at Penney’s.
“We are re-establishing and rebuilding the foundational practices needed to strengthen our day-to-day business,” the ceo said. “The expectations we set for 2019 are built with a deliberate focus on restoring the discipline required to enhance inventory management and productivity, lower our cost of goods sold and return growth in a sustainable and profitable manner…While we still have work to do on our top line, I strongly believe that growing sales in an unprofitable way is simply not an option. The only way to reconstruct the business is through a holistic approach across all the key tenets of strategic, purposeful and effective retailing.”