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J.C. Penney is revving up its fashion quotient.

This story first appeared in the December 2, 2009 issue of WWD. Subscribe Today.

In a move that chief executive officer Myron E. “Mike” Ullman 3rd called a “game changer” along the lines of the addition of beauty store Sephora to its mix, the Plano, Tex.-based company said Tuesday it has made a deal with Spanish fast-fashion retailer Mango to sell the MNG by Mango brand exclusively in the U.S. department store market.

Billed as the largest rollout of any fast-fashion concept, the line of casual and career sportswear and accessories will launch in up to 75 J.C. Penney stores and on its Web site for fall 2010 and expand to 600 stores by fall 2011.

Mango has more than 1,300 stores in 94 countries, but only 12 freestanding units in the U.S. The deal will immediately allow the Barcelona-based retailer to blanket the U.S. with its core collection — vaulting over the likes of H&M, Zara and Topshop — while giving Penney’s the ability to quickly provide European runway-inspired product to its customers.

“Fast fashion is sweeping around the world and we looked at the five or six people who are doing it very well and were able to attract a strong partner like Mango,” Ullman said. “It will be sitting right across from Sephora in our stores and will offer our customers fast fashion at a price they’ll really respond to.”

MNG by Mango will bolster Penney’s contemporary offerings for women. “Fast fashion for the young, modern woman is our highest-potential business opportunity,” said Ullman. “The Mango name has become synonymous with fashion at a moderate price and for innovation in creating quality merchandise at enormous speed. We look forward to working with the Mango team to bring this same excitement to U.S. consumers, and to helping Mango build on the incredible success it has achieved around the world.”

He said Penney’s research shows that, while customers understand the retailer’s quality and value offering, the chain does not get credit for on-target fashion. “But we’re stepping it up,” Ullman said. “We really believe in this. We like these folks, we think they’re terrific. They get it.”

Enric Casi, Mango’s ceo, was also upbeat about the pairing. “Every time we bring Mango to a new international market, it has driven immediate, strong demand, and we have only begun to capitalize on the great desire for Mango in the U.S. J.C. Penney is the perfect match for us to take advantage of the opportunity we see for the MNG by Mango brand in this market. J.C. Penney is increasingly known as a leader in affordable style and has an exceptional track record in merchandising and marketing contemporary brands for the U.S. customer.”

He said his company “was interested in this collaboration, given that J.C. Penney serves half of America’s families…allowing Mango to very rapidly expand the presence and exposure of the brand across the U.S.”

Liz Sweney, Penney’s executive vice president and general merchandise manager of women’s apparel, told WWD the company recently conducted an analysis of fast-fashion retailers and realized Mango would be a great fit with J.C. Penney. “They only have 12 stores here, and this gives them an enormous opportunity to grow because of the number of stores we operate and our dot-com business. For us, it allows us to bring fast fashion to our customers at a very affordable price.”

Although Sweney said no price points have been set yet, MNG by Mango will fall into a space between “better and best” within the Penney’s assortment. And since Penney’s is a promotional department store, the merchandise will be promoted as part of the company’s overall cadence. “We believe we’ll be stepping up style with price reassurance,” she said.

MNG by Mango will anchor the company’s women’s contemporary area and Penney’s will construct areas of 1,000 square feet on average to house the brand. Although the store design plan has not been finalized, Sweney said Penney’s will work with Mango, which has “a wonderful store environment,” to create a unique shopping experience. “We’re going to make sure she feels this is new space,” she said.

The items offered will include jeans, T-shirts, casual knit tops and woven shirts as well as careerwear. And, for the first time, Penney’s also will merchandise fashion accessories in the shops. “We’ll be offering a full lifestyle collection,” Sweney said. “That’s new for us.”

The brand will be targeted to the 18- to 35-year-old, which Sweney called “a white space for us.” It is also expected to appeal to an Hispanic customer.

On the floors, MNG will join I [Heart] Ronson, Allen B. by Allen Schwartz, Bisou Bisou and Penney’s own She Said brand, and will be adjacent to the Sephora inside J.C. Penney areas. “It will create a really compelling offer,” Sweney noted. Allen B. and Bisou Bisou are considered “best” pricing, while I [Heart] Ronson and She Said are “better” brands.

“Contemporary is viewed as a real growth area for us,” Sweney said.

Of the four lifestyles that Penney’s offers — conservative, contemporary, traditional and modern — contemporary was the least penetrated five years ago. “It was the most underdeveloped of the areas for us, and we really put our minds together to develop it,” she said. As a result, Penney’s negotiated with some of the industry’s leading players to add strong contemporary labels such as Bisou Bisou, Allen B. and I [Heart] Ronson, effectively elevating the mix.

The MNG by Mango merchandise will be designed by Mango and will utilize the company’s fast sourcing capabilities. Combined with Penney’s state-of-the-art logistics, planning and allocation, it will allow new merchandise to be delivered at least twice a month. “There are going to be really frequent deliveries,” Sweney said. “That’s one of the reasons we partnered with them. How they develop fast fashion is brilliant.”

The Mango stores in the U.S. offer both Mango and MNG by Mango product, but Sweney said the units here will be transitioning out of the MNG product by the time it hits Penney’s stores next fall. The same MNG product being sold at Penney’s will continue to be available in markets outside the U.S., however, Sweney said.

She said the deal with Mango is “multiyear,” but declined to be more specific.

There are no plans right now to expand to other product categories, such as men’s wear, Sweney said. “It’s primarily a female business, but we always have an open-to-listen policy. We just feel that we’re well matched as companies and we’re looking forward to a great relationship.”

Mango had sales in 2008 of 1.44 billion euros, or approximately $2.1 billion at current exchange, an increase of 8 percent over the previous fiscal year.