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The View on Vendors

SOURCE: JCP INTERNAL DATA.SOURCE: JCP INTERNAL DATA.
NEW YORK - During JCPenney's "fresh air" presentations here in late January, ceo Ron Johnson criticized the current set-up of retail/vendor relations, calling it "one of the most broken things in the retail industry."
     The vendor's job, he added, is to design, source and deliver on time. The retailer's job is to market and sell. Vendors and retailers shouldn't be co-mingling their profits and "playing games."
     JCP held a summit specifically for vendors during its visit to New York to outline the new plan. Johnson said vendors came away thinking it's all "too good to be true."
     During a later summit for the financial community, an analyst asked if that means Penney will no longer demand markdown money. There was a distinct pause.
     That would be a goal over the long run, said Johnson. Chief operating officer Mike Kramer jumped in to clarify, saying he is not opposed to vendor contributions but does object "when it becomes a drug."
     In fact, throughout the financial session as execs described their plan to reduce costs by $900 million to "self-fund" the transformation of 1,100-plus stores, vendor participation was cited frequently - once in the form of making a "capital investment" in creating the shop-in shop formats.
     Executives also said that as Penney converts the floor from its current format into 100 branded shop-in-shops, vendors will be invited to offer their ideas and vie for the real estate.

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