DDB WILL REVISE IMAGE FOR PENNEY’S

Byline: Holly Haber

DALLAS — J.C. Penney needs a new image and it has turned to DDB Worldwide to help create it.
As part of a strategy to revitalize its flagging department store business, J.C. Penney contracted DDB Worldwide on Thursday to be its advertising agency of record, replacing Temerlin McClain, which has worked for the retailer since the early Nineties.
“The assignment is repositioning the J.C. Penney brand, which obviously is a large assignment,” said Steve Farley, senior vice president and chief marketing officer for Penney’s. “We will make the brand more relevant and meaningful to our customers. Every point of customer contact will reflect the new brand positioning.”
While there’s no plan to change the logo, everything else is on the table for redesign, from shopping bags to TV ads, he noted. The campaign, valued at $200 million a year, will break in September.
“The core will be our customer — a total, relentless focus on the customer,” Farley said. “The whole process is to start understanding her better than we have ever understood her before. Over the last year, we’ve talked to 70,000 or 80,000 consumers to understand her life, what she is all about and what she wants when she goes shopping, and to look in the mirror and see how she sees us.
“She is not angry with us,” he said. “She is more or less indifferent. We have fallen off her radar screen, so that is what this is all about: How do we get back on her radar screen and become her preferred choice?”
DDB was chosen for its retail expertise and understanding of American icons as well as its global network, which includes offices in 98 countries and units specializing in media planning, media buying and direct marketing.
With annual billings of $15.4 billion, DDB claims to be the largest ad agency in the U.S. and to hold the number-three ranking in the world. Other accounts include FTD, McDonald’s and U.S. West. In the past, DDB has worked for Montgomery Ward and Sears Roebuck & Co.
Penney’s, which also owns Eckerd drugstores, has been plagued by weak sales in its department stores for several years.
To improve results, the company hired several executives from outside its ranks last year, most notably Vanessa Castagna, who came on board as chief operating officer of stores, merchandising and catalog from Wal-Mart, where she was senior vice president and general merchandise manager.
Castagna has moved to speed up merchandise procurement, eliminate overstuffing of racks in the stores, widen aisles and shake up the executive ranks. One of her initiatives was as simple as ensuring that every item advertised in Penney’s weekly circulars was in stock in all 1,140 stores, not just the 400 largest ones.
But Penney’s has yet to see positive results.
For the quarter ended Jan. 29, the company posted a loss of $12 million, or 8 cents a share, as revenues rose 5.2 percent to $9.8 billion. Department store and catalog sales slid 1.6 percent to $6.15 billion and comparable-store sales fell 1.4 percent.
For the year, the company earned $336 million, a drop of 43 percent from $594 million the previous year. Revenue rose 7 percent to $32.5 billion from $30.4 billion, but department store and catalog sales fell 0.08 percent to $18.96 billion from $19.11 billion.