Can JCPenney Fashion a Turnaround with Joe Fresh and Other Fashionistas?

Posted by Barry Silverstein on July 25, 2012 01:59 PM

When big retailers crash and burn, it seems they do so with style. The trials and tribulations of Sears/Kmart, despite its stylish moves into the fashion world, have been chronic and ongoing. Equally precarious these days is the fate of JCPenney.

In June, JCPenney brand president Michael Francis exited the troubled retailer after less than a year, in a shakeup that was seen as his taking the fall for CEO Ron Johnson. Francis, a former Target exec, along with Johnson, who formerly ran Apple's stores, couldn't combine their top shelf retail experience to effect a turnaround. On the contrary, the company's "fair and square pricing" (with the new logo at right to support the concept) essentially ditched sales and moved to Walmart-like "everyday low" pricing and twice-monthly clearance events. It was anything but successful. In fact, this lead balloon is now being replaced with a return to the more common retail strategy of a "sale."

Is it too little too late? The strapped J. C. Penney Company is cutting 350 jobs in its headquarters and selling part of its stake in Simon Property Group, a major mall developer, to raise $248 million in cash. Even so, the company is trying its darndest to crawl its way back into being a legitimate retail competitor, and that's where fashion comes in.

The company recently announced a new partnership with fashion guru Nina Garcia, whose claim to fame includes being a Project Runway judge, best-selling author, and fashion director of Marie Claire magazine — in addition to serving as a "fashion expert" for Target. Switching retail partners, Garcia will now play a role in advising the retailer's merchandise and design teams so the JCPenney apparel collections are up to snuff.

Fashion will be a core element of in-store changes as well. Nearly 700 JCPenney stores around the U.S. are adding in-store shops with a focus on fashion —specifically jeans — slated to open on August 1. The shops will feature Arizona and Levi's brands, along with "i jeans by Buffalo," a new brand that will see new products added monthly. "Fit specialists" and "denim bars" will be available, as will Levi's "Curve ID" program to help women find jeans by body type.

JCPenney is pinning a lot of hopes on the store-within-a-store concept at the same time that Target is ramping up its in-store branded boutique partnerships with a new crop of hip retail brands including Kirna Zabete coming this fall.

In September, it will open shops that focus on Izod, Liz Claiborne, and men's and women's wear. Next April, the retailer just announced that it will open some 700 dedicated in-store boutiques pitching Canada's red hot Joe Fresh chain of fast fashion stores founded by Loblaw's and Club Monaco founded Joe Mimran (hence the brand name).

Joe Fresh is Canada's largest apparel brand, so adding Joe's disintinctive orange brand framework to JCPenney's red square could be a win-win: Joe Fresh gets exposure across the U.S., where it's been establishing a foothold in New York City and New Jersey, while JCPenney stores gain exclusive access to another brand it can peddle through its shops. CEO Johnson calls it "part of JCPenney's repositioning to a completely re-imagined department store."

It probably won't be long before we find out if that re-imagining will do the trick. As JCP CEO Johnson quipped , "We are trying to essentially convert the Titanic into 1,100 WaveRunners, and that is really hard to do."

More about: Retail, Fashion, JCPenney, Joe Fresh, Izod, Liz Claiborne, Levi's, Arizon, Buffalo, Loblaw's, Club Monaco, Nina Garcia, Target, Project Runway, Kirna Zabete, Pop-Ups

Paulito says:

Not just fashion but mobile -- JC Penney is planning to replace its cash registers with mobile check-out devices by next year, a move clearly inspired by Apple stores:

www.mobilecommercedaily.com/.../jcpenney-to-replace-cash-registers-with-mobile-checkout-devices-by-2013

July 26, 2012 12:01 AM #

rts says:

Good grief. Penney's was always known to have the best t-shirts, kids clothes, inexpensive but good drapes and sheets and watches, shoes, accessories that were plain and inexpensive for good quality. The common family household store. What's with trying to go upscale? It didn't work for Target, Kmart or gulp, Montgomery Wards. Sears with "Craftsman" quality is the only thing keeping that one going. And the credit. A JCPenny card was always good for back to school. Perhaps some of the grand visions are missing the point of what certain stores were known for. Whenever the upper management gets a great idea, time to get rid of them before they mess it up. Perhaps they should go back to old fashioned cash registers as well. Self pay kiosks are made to cut the cost of employees. That translates to cutting customer service. And they wonder why these venerable old companies are dying. We will see what "re-imaging" nets them this time. Notice how many auto manufactures are having success with retro models. Customers want good old fashioned products and customer service.

July 26, 2012 02:37 AM #

Remy says:

Yikes. It's a good thing the leaders in retail like Apple, H&M, Uniqlo and Zara don't listen to this kind of risk-adverse advice.

Is it even worth pointing out there are huge differences between selling styles ("retro models") and defining a modern, engaging customer experience...?

July 26, 2012 09:55 AM #

Apple knows their product and customer. That includes coming up with new and incredibly innovative products. If Apple decided to be a Microsoft with more conservative approach they would not make it. They know who they are and what's expected of them. The customers knows who they are and appreciates them. When Steve Jobs died, many were anxious apple would go conservative. Doing that would take them out of the expectation. That means taking risks everyday. If Apple didn't take the risks, they would be out of business.

But JCPenny has years of laying down who they are. Not risk takers, but your everyday common good sense department store. To go outside of that spells disaster for them. They are who they are and made a success out of it. Just like Apple, the expectation is there. One is risk, one is old family clothing store. The risk for JCPenny is staying the course and finding innovative ways to market that. Not reinvent themselves. Apple is electric and energetic, JCPenny is warm blankets and cozy t-shirts. But management of JCPennys finds that boring. It is boring. Lots of people want boring, but nice and a good deal. And sales on things.

It's knowing who you are and being comfortable with that and serving customers. And not expecting to be Apple or H&M, but simply tried and true family product values. Zara's trendy styles come and go, but Sears and JCPenny soldier on providing the basic needs of families with kids, houses, jobs, mortgages and school clothes. When JCPenny tries to be Uniqlo it creates a disconnect. What is JCPenny trying to do? They are who they are and would be best served to celebrate boring, middle class take-care-of-the-family products. Like they always have. But be innovative with their marketing of those values. Not try to be JCP and reinvent the wheel. Companies like JCPenny lose it when they try to reinvent. They are not Apple, H&M, Uniqlo or Zara. And if they try, it will lose the focus of who they are.

July 26, 2012 11:33 AM #