• Warren Shoulberg

Martha Still On Track For JCP Spring 2013 Rollout

NEW YORK - Martha Stewart will indeed be arriving at JCP stores next spring ... but a little less of her and a little later than originally planned.
     That seemed to be the take from the man who should know: JCP president Ron Johnson, who addressed a Fashion Group International luncheon, co-sponsored by The Robin Report newsletter, here last week.
     Johnson, in response to a question about the program, which has been tagged as the linchpin to the company's new home strategy but has been mired down in a legal struggle with Macy's, wasn't overly talkative about the
Ron JohnsonRon Johnson at last week’s Fashion Group International luncheon
subject. "I'm not going to talk about it here. We're in the middle of a legal situation on it."
     But then he added, "You will see a variety of products from Martha Stewart and products designed by Martha Stewart this spring."
     Court rulings in the case have so far prohibited JCP - Johnson's name for the retailer still known to most of the world as J.C. Penney - from selling Martha Stewart branded product in the categories it is currently being sold under at Macy's. That would include most core home textiles classifications as well as a number of other home areas.
     Johnson's answer could seem to imply that merchandise bearing her name will be on the floor in non-competing categories and that possibly products developed by her organization will be sold but not under her brand name.
     Whatever they are and whatever they are called, it seems as if they will be showing up a little later than originally announced. When Johnson first unveiled his plan for the total reinvention of the retailer last winter - exactly 250 days ago he pointed out last week- the home roll-out was set for March. More recently the company has pointed to April.
     At his presentation last week, he said "The Street" - the merchandising name for the wider-aisled store layout that is a key component of the new plan - will be rolled out by May 1.
     The Street is currently part of a closed door test at a JCP store in the Dallas area that Johnson talked about where 12 of the retailer's new shop concepts are in place. Eventually 700 of the company's 1,100 units - those above 50,000 square feet - will be remodeled into 100 shops, formatted around both brands and classifications. Other home brands to be introduced, conceivably by next spring, include Michael Graves and Conran's, although specifics have not been announced yet.
   Johnson took a series of questions both from moderator Robin Lewis, editor of The Robin Report, and anonymously from the audience via the Internet. Among them were:
     Why didn't he test the new merchandising plan rather than roll it out to all stores? "It was impossible to test. This was the only way we could do it. If you believe in it, you do it."
     Why not wait to implement the new pricing policy until the merchandising plan was in place? "We felt we had to get the pricing work down first. Our sales being down is a temporary thing. But the pricing was too confusing so we changed it. We're getting there, it just takes time."
     What will be the ratio of private label and exclusives to national brands? "We don't view it this way exactly. If you look at department stores, their peak was at 25% private and 75% national. JCP is at 50% private now and we'll reduce that."
     How has it gone changing the culture at the company? "It's been hard. Some people left and some have joined in what we're doing. I think we're making good progress."
     What are you doing about online? "The online area is the most promotional in retailing right now, but that's a short-term thing. Home has been over half of our online business and we've been hurt by it."
     If you are successful who will you take market share from? "It's going to come from the big players like Bed Bath & Beyond, Macy's and Walmart, not only from one competitor."
     Johnson also talked about his personal journey during the JCP transformation. "I thought it was going to be fun ... well, it's been pretty fun so far," he said, flashing his trademark smile, while touting the JCP sport shirt he was wearing. "I feel like I'm in the middle of a reality show.
     "Will it work? I believe so. I've seen this movie before."

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