Joe Fresh has run its course at J.C. Penney.
Joe Fresh shops will be coming down this year, as the two companies have decided to part ways after their agreement concludes.
“By mutual agreement, Joe Fresh and J.C. Penney have determined not to renew our existing distribution agreement that expires on Jan. 30, 2016,” Mario Grauso, president of Joe Fresh, said in a statement to WWD. “This decision is driven by changes to our respective growth strategies. We have valued our relationship with J.C. Penney and J.C. Penney customers over the past two years.”
Going forward, Grauso added, “Joe Fresh will focus on investing in our standalone store network and e-commerce, expanding our international partnerships and continuing to strengthen our core Canada business.”
He was not available for further comment.
At first, the collaboration was highly touted, with Penney’s announcing in 2012 that hundreds of Joe Fresh shops selling men’s, women’s and kids apparel would open inside its department stores. The two companies worked out an agreement whereby Joe Fresh designed the shops and supplied the merchandise, manufactured by Joe Fresh. The plan was to open Joe Fresh shops in 683 Penney doors, each from 1,000 to 2,500 square feet, and to sell the brand on Penney’s website.
Joe Fresh shops received prime real estate inside Penney’s, in many cases front and center by the entrances.
However, in subsequent seasons, the Joe Fresh distribution at Penney’s was pared down to 200 locations and Joe Fresh kids was no longer sold at Penney’s, though men’s and women’s merchandise is still sold.
The architects of the Penney’s-Joe Fresh rollout — former Penney’s chief executive officer Ron Johnson and former Joe Fresh creative director Joe Mimran — are no longer at their respective companies.
The plan was part of Johnson’s grandiose vision to reinvent the department store chain by introducing modern, hip brands and shops-in-shop to draw new and younger customers and update the store’s image. He also changed the marketing, cutting out coupons and private brands. Mimran bought into the vision. In the process, Penney’s suffered losses, lost customers and billions of dollars in revenues, leading to Johnson getting forced out.
In March, Joe Fresh revealed that Mimran would be exiting the company he founded nine years ago, putting Grauso in charge of the design team on top of other responsibilities. Grauso said it was Mimran’s decision to leave.
Joe Fresh is part of Loblaw Cos. Ltd., controlled by the Weston family which also owns the Selfridges Group that operates Holt Renfrew in Canada, Brown Thomas in Ireland and Selfridges in the U.K.
While winding down with Penney’s, Joe Fresh continues to open free-standing stores around the world. The most recent announcement centered on Latin America, with the first stores opening in Mexico in early summer. Honduras, Costa Rica, Guatemala, Nicaragua and El Salvador will soon follow. Joe Fresh already has extensive distribution in Canada via Loblaw and its own stores. Joe Fresh stores also operate in South Korea and the Middle East.
“Joe Fresh wasn’t what the customer at J.C. Penney wanted,” said one retail analyst. “It’s the right decision to pull it out. They can make more room for something else.”
“We appreciate the collaboration that J.C. Penney has shared with Joe Fresh over the last two years and the opportunity to introduce the brand to more American consumers both online at jcpenney.com and in our larger stores across the country. We wish their company continued success as they expand into other markets,” said Liz Sweney, Penney’s executive vice president and chief merchant officer.