JCP Cautious, Hopeful on Home
September 13, 2009,
JCPenney chairman and ceo Mike Ullman touched on a range of issues during his presentation at the Goldman Sachs Retailing conference here last week — from the recent back-to-school season's performance, to the retailer's new Manhattan flagship store, to the state of some of the home brands, and expectations for this holiday.
"We feel we did well in our back-to-school season," Ullman said. "We met our expectations, particularly in areas where we were able to register key fashion elements, whether it be skinny jeans or halter tops, athletic shoes, dress up, the girls business and boys business, and juniors across the board. Less successful was urban young men's as well as fine jewelry and home — [the latter two] which aren't really back-to-school categories, but those are areas where we aren't doing as well, probably based on the economy."
While sales in home have been admittedly slack on the whole, there are bright spots, he noted. Linden Street, which is JCP's moderately priced private label collection of soft home, furniture and accent pieces, "has done very, very well," said Ullman.
And fresh goods are on the way; the Cindy Crawford Style collection, for instance, is positioned as the new centerpiece of the mid-tier merchant's home division.
"Whether it be bath, bed, window coverings or furniture, we believe this is sensible style and great value for our customer and a great brand that will resonate with our customers," Ullman asserted.
Also generating "high expectations" is chain's new Manhattan store, which opened in late July at the Manhattan Mall in Midtown. Ullman estimated the site could generate sales that are five times that of an average JCP unit.
For the next big selling season — holiday — JCP is projecting a better season than last year.
"I think that this holiday is not necessarily going to be a wildly positive experience for retailers, but it's not going to be the Draconian experience of a year ago," Ullman suggested. "Most of us had way more inventory than we could possibly sell a year ago and went through the process of trying to figure out how to get it out of the door by the end of the season, and obviously did some things that were not gross profits-friendly."
This year, shoppers can expect to find "more products being sold intentionally at the price they were intended to be sold at," he said, "and I think it will put some pressure on the customer to shop in a more normal fashion than waiting until the last minute."
He said that across retail this coming season he expects there to be fewer products carrying "desperation pricing."
In the case of JCP, "We will definitely look like a Christmas store, and we think we do that well. Our gifting will be very prevalent and our promotion will be as promotional as ever, but not more so," he said.
Still, JCP's outlook for the country's economy in coming months is cautiously optimistic.
"We see a gradual recovery, and we're planning accordingly," Ullman said. "We really don't see a drastic rebound in consumer behavior. Consumers are acting rationally — they are paying down their debt to the extent that they can, spending on what they need. And on the more discretionary things, they are being more cautious...The future is bright but it will take longer to recover."
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