JCPenney is pursuing “large scale transformation”

Category: GARMENTS

Country: United States

With finances now in order, retail investing for growth

Jennifer Marks -Editor in Chief
November 28, 2022.

Lewisville, Texas – JCPenney recently achieved something that hasn’t happened in years: getting core customers to shop more frequently.

The retailer is also regaining market share in home and other key categories, JCPenney CEO Marc Rosen told CNN Business.

Here are 3 key takeaways from the interview, which CNN posted yesterday:

The customer. Roughly 30% of JCPenney’s customers are Black, brown or indigenous. “They want to see brands brought to them by brown and Black founders,” said Rosen. The company is positioning itself as the go-to retailer for “America’s diverse families.”

Spending behavior. Asked by CNN correspondent Nathanial Meyersohn whether JCPenney is drawing trade-down shoppers, Rosen didn’t respond directly. However, he noted that more customers are buying “good” tier products and private label brands.

The importance of physical stores: Although JCPenney now operates 54% fewer stores than it did in 2016, the remaining locations are important to rebuilding the business, including omnichannel. When Penney pulls out of a market, it also sees a decline there in digital sales. “The store is a billboard in a way. It says to consumers, ‘We’re here, this is the brand. You can come in and try things on. You have a place where you can return online orders,’” said Rosen.

The company currently operates roughly 650 physical stores, down from 846 when it filed bankruptcy in spring 2020. In fall 2020, the company was acquired by Simon Property Group and Brookfield Asset Management, major mall operators. This fall, Rosen told WWD that the ownership is now investing to grow the business. Priorities include improving stores, strengthening the supply chain and upgrading technology, he told CNN.

“I believe in taking on large scale transformation,” Rosen, added. “There was an opportunity to really take this brand and make it relevant again.”

Within the home textiles business, JCPenney is still a Top 20 retailer, with estimated 2021 soft home sales of more than $600 million, according to HTT’s annual Retail Giants report.

However, the company has a challenge on its hands as its looks to rebuild its business. As the CNN report noted, Placer.ai data showed store visits at JCPenney down nearly 30% in October and data from SimilarWeb found the retailer’s web traffic up just 1.26% during the same period.

Courtesy: https://hfd.bridgetowermedia.com/acton/ct/41765/s-24a6-2211/Bct/q-005e/l-0019:91ab0/ct9_2/1/lu?sid=TV2%3AQip0TXME7