As Other Major Retailers Flee The Malls, JCPenney Moves In
By Christine Kern, contributing writer
Retailer striving to become King of the Malls.
While Sears and Macy’s are announcing store closings, pulling out of shopping malls nationwide, JCPenney is positioning itself to move in and become King of the Malls, according to Bloomberg. While its competitors are retrenching, JCPenney has experienced an amazing turnaround in the past four years, adding new merchandise, exclusive partnerships, and new services to entice shoppers to its network of more than 1,000 stores.
Meanwhile, Sears’ recorded $9 million in losses in recent years, closing stores and leveraging real estate to recoup them. Macy’s also recently announced that it was closing 100 stores, meaning that JCPenney will become the main anchor in many malls across the nation.
One place that JCPenney is capitalizing on Sears’ demise is in the appliance game. "Sears is donating share in appliances" as it closes stores, Ellison told the Dallas News. Penney's high penetration of women shoppers, about 70 percent of its customers, is expected to be a plus in the new appliance push, he said.
"We have no aspirations to be No. 1 in market share for appliances," Ellison said. "To do that, we have to own the inventory. But we think we can be disruptive and can be convenient to our customers."
While its competitors struggle, JCPenney has been focused on initiatives to boost sales. The retailer’s turnaround seems to be working: while many other retailers reported lackluster figures for the 2015 Holiday Shopping Season, JCPenney saw comparable store sales up 3.9 percent in November and December. Earlier this summer, the company announced that it was redesigning its IT capabilities to help bring them up to speed. The revamp efforts include out-sourcing some positions while also adding other domestic jobs to make IT more efficient and cost-effective. And this spring, the retailer launched a new clothing line called Boutique+ designed exclusively for plus-sized women in an effort to tap this growing apparel market.
“When I joined the company, my first thought was, ‘Man, we’ve got a lot of stores to close,”’ Marvin Ellison, who became president in 2014 and CEO last August, told Bloomberg in an interview. “It was the opposite.’’
According to Ellison, the company has fewer than 10 stores that are not profitable. Comparable-store sales rose 2.2 percent last quarter.
Ellison’s direction is proving to be positive. The chain is taking advantage of the retreat of its rivals from shopping malls. He explained that when a Sears or Macy’s store closes its doors, JCPenney then uses direct mail invitations in the zip code to convert those customers. Ellison said, “You make sure you invite them in.”
Cowen & Co. analyst Oliver Chen told Bloomberg that J.C. Penney’s aim of improving its store experience to include what it calls retail-tainment “could speak to how the J.C. Penney of the future could be an important destination.”