JCPenney back-to-school good, holiday should be better than '08
September 9, 2009,
New York – JCPenney chairman and ceo Myron “Mike” Ullman touched on a range of issues during his presentation at the Goldman Sachs Retailing conference here this morning – from the recent back-to-school season’s performance to the retailer’s new Manhattan store to the state of some of the home brands to expectations for this holiday.
“We feel we did well in our back-to-school season,” he 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 have been bright spots. Linden Street, which is JCP’s moderately priced private label collection of soft home goods, furniture and accent pieces, “has done very, very well,” said Ullman.
And the Cindy Crawford Style collection is positioned as the new centerpiece of the mid-tier department store’s home business.
“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 said.
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 alone 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 said. “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,” Ullman 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 added that he expects there to be fewer products carrying “desperation pricing.”
In the case of JCP, specifically, this holiday, “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.”
That said, JCP’s outlook for the country’s economy for the coming months is cautiously optimistic.
“We see a gradual recovery, and we’re planning accordingly,” he 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 itwill take longer to recover.”