Penney execs: What's in a name?
February 16, 2004,
While the soon-to-be launched Chris Madden program for the JCPenney Home Collection is in the spotlight, the $1.5 billion Home Collection is quietly growing with new products and a strong program for new customer acquisition.
In a wide-ranging discussion prior to the preview of the Chris Madden Collection, Allen Questrom, Penney's chairman and CEO, challenged some of the names that are springing up across all product lines.
"There are enough names out there that won't mean anything," he said. "Madden is a brand with personality, the product stands up. Ralph Lauren is a brand with a point of view, and many of the others are just labels or names that are meaningless."
Castagna added, "Great brands provide an ease of shopping for consumers. They help them to understand the values, convenience of channels and ease of shopping."
Questrom pointed to the Pillowtex situation and the four brands that are on the market. "Royal Velvet, when Dave Tracy was in charge, had a consistency and newness and relevance. He had a focus and didn't deviate."
Similarly, he cited the company's Stafford men's brand. "It has to meet a standard."
At Penney, 60 percent of the mix is national brands, 40 percent JCPenney brands, Questrom noted.
As for brands in home textiles, Charles Chinni, JCPenney executive vice president and general merchandise manager of home, fine jewelry, and family footwear, related that the four big Pillowtex brands "are a challenge in the future. More business now is going private label and proprietary. It's amazing how quickly those brands could be replaced and absorbed by other product."
As the retailing business continues to move to offshore sourcing, and price deflation, Penney sees opportunities to keep some of the price points with added value.
"We have to keep coming up with new ideas and create new products," Questrom asserted. "We have to provide the right taste level — not leading edge, but the right fashionability."
Defining this position somewhat, Castagna noted, "We add new layers of business like Chris Madden. But three years ago, Charlie began a down program that now is running in the tens of millions of dollars."
Additionally, she said, "We add quality to products we already have with both fashion and technical features."
And as the internal sourcing effort grows in all areas of Penney, Chinni said, "Our ability to execute will be stronger. But we will have challenges to deliver new product, and in a cohesive manner integrating product, design, technology, (and) sourcing."
Chinni cited the efforts "between our team headed by Deb Evans and Chris' team in bringing together this important partnership."
Castagna added, "Our direct sourcing business has increased and will increase. But we also will look to other suppliers."
As for offshore sourcing, Questrom emphasized the oversight that Penney exerts on these facilities. "We inspect sites constantly with field inspectors worldwide." And the inspections range from health and technical standards to labor standards, he said.
Looking at the Penney tri-channel retail approach, Castagna identified the strengths of each. The catalog has a six- or seven-month lifespan that consumers can keep looking at. The store assortment is done on a matter of weeks and the Internet is on 24 hours. "We can use the Internet to test product" to move to the stores or catalog as well as to offer faster fashion, she said.
For Penney, the Chris Madden collection is its first coordinated tri-channel effort, Chinni said.