J.C. PENNEY

Byline: Rusty Williamson

DALLAS — When customers talk, J.C. Penney listens.
That’s why it was selected as American consumers’ favorite store, according to the WWD survey.
Feedback from its target customers, largely attained through market research and focus groups, plays a major role in shaping the agenda of the $21.4 billion department store giant — whether it’s revising the look of stores or the merchandise inside.
Penney’s doesn’t make decisions fast and it doesn’t enact them quickly. It researches and researches and then analyzes and analyzes. And then all the data winds up in committees. But when a decision is reached, all wheels start turning and changes are significant. In most cases, the bottom line benefits.
The most significant change has been Penney’s 10-year transformation from a mass merchant of hard goods and dowdy clothing to a department store with some fashion leadership, particularly strong private labels.
It was a tough undertaking, but the 1,238-unit chain has succeeded in luring new customers with a broad mix of private labels and an increasing number of national brands, especially in cosmetics and women’s.
According to the WWD survey, Penney’s has very high approval ratings from households with children, preschool to college age; working woman, and traditional families. The biggest group shopping there are women ages 30-39 from households with annual incomes of $35,000 to $70,000. Why do shoppers go to Penney’s? WWD’s survey indicates it’s because Penney’s is priced right, offers great values, sells clothing that generally fits and is of sufficient quality and has a private label that is among the best in the department store sector. The chain manages to do a lot of things well.
Though its women’s business seems to be getting back on the beam after falling off in 1995, Penney’s has to deal with the threat of competitors emulating its success.
Sears, with its catchy “softer side” campaign and beefed-up stable of private and national labels, is a force that can’t be ignored. However, Penney’s insists it’s not reacting to Sears or other competitors; that it responds to customer needs.
The chain recently unveiled what industry sources say is a prototype for the future: a 233,000-square-foot, three-level store at the Valley View Center here. It’s noticeable for its sleek, rambling look and a merchandise mix that devotes half the space to women’s categories.
John Cody Jr., president of Penney’s Stores division, said the wide aisles, uncluttered racks, improved lighting and deep selection of merchandise at Valley View represent “an ongoing response to give our customers what they want. The store will serve as a way to tell our female consumers that when you look for women’s apparel, Penney’s is the place to shop.”
Penney’s officials say women make 80 percent of purchases at Penney’s, and women between 25 and 55 years old are considered the chain’s core customer.
On the racks at Valley View are such national women’s apparel brands as Kenar Dress, Cynthia Howe for Maggie Boutique, DW3 by David Warren, Donna Ricco, Robert Riel, Datiani and Oberon.
Private brands share the spotlight, including Worthington moderate sportswear, the St. John’s Bay weekend casual line, the Hunt Club business casual label and the billion-dollar denim giant called The Original Arizona Jeans Co.
Over the last year or so, department and catalog sales at Penney’s have slipped. But in the last few months there’s been an upswing, particularly in women’s private labels. Comp-store sales in August were up 7 percent, compared with a negative 0.4 percent slide in August 1995.
For the six months ended July 27, sales were up 2 percent to $8.9 billion.
Cody projected the women’s division would finish this year 5 to 7 percent ahead.
“J.C. Penney is in the process of finally getting its act together,” said Kurt Barnard, president of Barnard’s Retail Marketing Report, a forecasting service.

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