JCPenney Makes More Tweaks
Jennifer Marks -- Home Textiles Today, July 19, 2012
PLANO, TEXAS - Four months into its turnaround effort, JCPenney continues to refine its marketing message, pitch patience to Wall Street and rework its executive structure - including the appointment of a new general merchandise manager for home.
In a shift of positions, Paul Rutenis was promoted to gmm of home just over two weeks ago while John Tighe, who had held the position of svp/gmm of home since April 2010, moved over to become gmm of the men's division.
Rutenis joined JCP in April 2011 as the dmm for furniture and decorative accessories. He began his retail career with May Department Stores in 1991 and joined Dick's Sporting Goods in 2006 as dmm.
"One area we're very excited about is home," ceo Ron Johnson said at the Piper Jaffary Consumer Conference in New York last week. "We have an unlimited choice of product from a brand perspective."
Michael Graves has already developed 190 skus and Martha Stewart has knocked out around 3,000 for the new JCPenney shop-in-shops that will launch in the redesigned home department next spring.
Along with Stewart and Graves, other brands that have been announced so far for the home include Jonathan Adler, Sir Terrance Conran and Bodum as well as Royal Velvet, which is already in stores as a brand exclusive to JCP.
The brands will be offered "in an all-new presentation that's really going to be loved by customers," said Johnson.
JCPenney will begin rolling out its first shop-in-shops this fall, mainly in apparel. Widely known brands like Levi and Martha Stewart will likely go into all 1,100 stores, while more niche brands such as Michael Graves may only land in the company's 700 metro area stores, he said.
Late last week, the retailer announced another round of executive appointments in operations, planning and procurement.
Thorsten Weber, who has been with the company since 2002 in several roles, has been promoted to senior vp, merchandising planning and allocation. Prior to JCP, he worked for Kaufmann's department stores, starting in its merchandise training program and becoming a buyer.
Vaneet Grover has been appointed senior vp, procurement. He was previously senior vp, supply chain, for Tandy Brands. Before that, he held strategic sourcing and supply chain roles at Abercrombie & Fitch, Gap, Agilent Technologies and Boeing.
Both report to chief operating officer Mike Kramer.
Bob Peterson has been appointed to senior vp, operational strategy, and will be responsible for identifying and evaluating key business opportunities and strategic alliances. Peterson previously spent 20 years at Piper Jaffray in several positions, most recently leading the global equities business. Prior to that, he was the head of the Private Client Services business, where he helped to transition the business to a wealth management model and sell off the division to UBS. He reports jointly to coo Kramer and cfo Ken Hannah.
In addition, Eric Cerny has joined the retailer as vp, investor relations. Most recently, he oversaw investor relations at Abercrombie & Fitch.
Also last week, Johnson told analysts and investors that JCPenney expects a year of sales declines as it anniversaries last year's highly promotional selling calendar, then should experience rising year-over-year sales. The company continues to believe sales performance will improve later in the year, he added.
Rather than test the current streamlined pricing in one part of the country before adopting it across the company, "we decided we have to go through one year of transformation and we will get to the other side," said Johnson.
Rolling out the everyday pricing strategy in one fell swoop also allowed the company to immediately cut expenses, particularly ad spend and personnel, he said.
"It does take time for people to understand a pricing change," he said. "It's taking longer than I anticipated."
In discussing the experiences that led him to forge the current policy, Johnson offered a story about his time in the home department at Target, where he spent five of his 11 years at the retailer. In 1995, 40% of the merchandise in Target's home assortment sold through at a sale price, he said. By 2000, 97% of Target's home merchandise went out the door at full price.
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