Madden, Cowie Help Penney Registers Ring

Carole Sloan, December 13, 2004

Plano, Texas — At JCPenney, the Chris Madden Home and Colin Cowie collections, along with a growing synergy between the retail and direct-to-consumer businesses, are major contributors to the home divisions' sales increases this year.

While the home division did not equal the 12 percent November sales increase of the total company, “We had very positive comps,” said Charlie Chinni, executive vice president, home, fine jewelry and family shoes.

But while Chinni is pleased with the above-plan performances of both the Madden and Cowie sales, as well as their communication with customers, he sees “home being challenged on two fronts for 2005.”

First, he said, “Competition is heating up and making home a traffic builder for the total store, which is creating a renewed competitive environment.” In addition, the changes in the calendar are “very challenging,” leading to a view that, “business is a little uncertain for '05.”

Specifically, he cited sheets, basic bed-in-a-bag and towels as being “under enormous pricing pressure, but sheets are up very nicely.”

At the same time, “Clearly, customers are spending their dollars differently.” As a result, Penney “will continue to grow and deliver unique new categories to enhance the new lifestyle choices,” he said. This includes emphasis on entertainment/decorating, wellness, health and physical activities.

In addition, Chinni sees “the whole tweener segment as one of the biggest growth areas. Bedrooms as related to teens — that lifestyle is on fire,” he maintained. The tweener business is one that he cites as having a strong direct/retail synergy. “The tweener business is enormous in catalog, and many retail items started there.”

Discussing the Chris Madden program specifically, Chinni said, “There were no real disappointments except for lamps. All the others were equal or above plan. We're very excited about the customer acceptance across the board.” Looking back and ahead, Chinni said, “Chris is terrific in fitting product into her decorating philosophy.”

A surprise in the Chris Madden launch “was that the business was particularly driven by furniture. That was our number one surprise, and we're going to greatly expand the furniture collection.” In fact, “Chris could very quickly become two-thirds of the total furniture assortment by the end of 2005.”

In other results, Chinni said, “Chris was extremely good in top-of-the-bed, bath was good — met plan, but it wasn't outstanding.”

As for window, a dominant Penney merchandise area, “We started small with Chris and it did so well, we're probably tripling the amount of Chris Madden window for 2005 with new fabrications and top treatments.”

When it comes to Colin Cowie, “The collection of tabletop, accessories and table linens came in above plan. And importantly, he's bringing in a new customer with a different lifestyle — more entertaining driven, younger.”

Coming up for Colin Cowie is a major expansion with outdoor living, “as well as new categories to expand into,” Chinni said.

Among the challenges for the coming years, he said, “Our biggest concern is ensuring supply and quality. How to maintain supply is a big issue.”

Discussing sheets specifically, Chinni observed, “Everyone is in the sheet business. Everyone is showing up at our door. But we must maintain our supply chain with relationships.”

Looking at potential new suppliers, he said, “We make decisions very quickly over time.” In towels, for example, the company has weekly supplies arriving, “and we're looking to apply that process from towels to other categories.”

As far as new suppliers are concerned, “We can evaluate them via the JCPenney global infrastructure. We will walk very carefully in evaluating using test orders.”

Looking at the relationship between retail and the catalog/Internet direct business, Chinni observed, “In home, there is a very strong synergy.” For the Internet specifically, he said, “One of the wonderful things is the ability to develop newness and be with trends. It's a wonderful place to test products, and it's been very influential in bath and top-of-the-bed.”

And the synergies in bed, bath and “certainly window” are one of the biggest in the company, Chinni reported. “The last few years on the Internet, “We've enjoyed the same dominance as we have in soft home at retail. And we see catalog turning up on a comp basis in home.”

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