With daffodils, cocktails and an array of Cindy Crawford’s outdoor wicker furniture setting a seasonal mood, J.C. Penney Co. Inc. staged a runway show of spring fashion exclusives inside Lincoln Center’s Alice Tully Hall in Manhattan on Tuesday night.
Fitted tailoring, animal prints, ruffle chiffon tops and city shorts were among the hipper, youthful looks trotted out, along with the creative individuals behind them. It’s all crucial to elevating productivity and differentiating Penney’s from Macy’s Inc., Kohl’s Corp. and other retailers scrambling to reach deals with designers and celebrities for proprietary lines.
Last year, Penney’s comparable-store sales were down 6.3 percent, but it was to some degree by design, according to Myron E. “Mike” Ullman 3rd, Penney’s chairman and chief executive officer. In an interview, he cited reductions in inventory and promotions to improve margins and cash flow. When asked if the exclusives were resonating with consumers, Ullman replied, “Absolutely. Private brands are growing at a faster rate than national brands.”
Penney executives said Ralph Lauren’s American Living line has emerged as the chain’s largest volume exclusive, excluding certain billion-dollar private labels done in-house, such as Arizona and St. John’s Bay. They said American Living is expected to eventually reach the billion-dollar mark and has been tweaked since its uneven launch two years ago. American Living was originally rolled out as a concept shop but last fall was remerchandised to sell in different areas of the store, by category. Pricing and fashion changes were made as well.
For the more youthful set, Olsenboye by the Olsen twins officially launches with advertising during televised Academy Awards coverage, and MNG by Mango, launching this fall, marks a Penney’s plunge into fast fashion, with concept shops being installed in 95 stores and anchoring the contemporary department, which includes such lines as I [Heart] Ronson and Bisou Bisou. MNG by Mango is expected to ramp up to 600 locations. The only other concept shop in the store is Sephora, which continues to be rolled out.
Among the crowd of 500 at the Tuesday event were Cindy Crawford — who for Penney’s only recently introduced a home collection and launches One Kiss jewelry in April — and the Olsens. Designers Nicole Miller of the nicole by Nicole Miller line; Charlotte Ronson of I [Heart] Ronson, and Michele Bohbot of Bisou Bisou also made appearances, along with Marty Staff of the Joe by Joseph Abboud men’s line. The labels are all exclusive to Penney’s.
Penney’s can count Liz Claiborne as another label it can call its own next fall. “That will be a major winner,” said analyst Walter Loeb. On the other hand, Loeb said Mango may require a learning curve. “Worldwide it’s recognized, but there aren’t enough stores in the U.S. yet,” he said.
With its aggressive buildup of labels, “Penney’s is really keeping the kettle boiling,” said Bud Konheim, ceo of Nicole Miller. “I’ve been in this business for 55 years,” Konheim added, noting he turns 75 on March 25. “Everybody is going young. That’s the key. Women are not shopping for something that’s age appropriate.”
For her BCBG line, “I don’t think Mango is competition,” said Bohbot. “It’s complimentary. It creates a challenge to push us to do fashion faster. We are bringing in novelties every five weeks. There is a quick turn.” Bohbot said her goal is to dress women head to toe at Penney’s: “We are launching handbags in two weeks and shoes, and preparing a fine jewelry launch.”