J.C. Penney Continues Home-Department Transformation
Myron Ullman III
PLANO, Texas-Continuing its battle to return to profitability, J.C. Penney is proceeding with its retransformation of its home department from the shop-oriented format established by former CEO Ron Johnson to one organized by category and classification.
In a conference call to financial analysts yesterday, CEO Myron Ullman III, who succeeded Johnson in April said this revamp should be "substantially completed" by next spring. Ullman outlined several initiatives in this effort. These include rebalancing the lifestyle mix to include more traditional styles and less modern styles, an increase in opening-price-point merchandise, a more balanced assortment of hard and soft goods (which should be about 50-50 once the changes are done) and improvements in identifying classifications in all key items.
More particularly, J.C. Penney will restore lost space in home to soft window treatments (of which, according to Ullman, it is the number one retailer) and luggage. Regarding the home shops, Ullman was less specific, saying the holidays will give the company an idea of shopper reaction.
"So [for] Jonathan Adler and Michael Graves and some of the other things that are really quite unique and quite special, we'll have an opportunity during holiday to see if those giftable items really resonate," he said. "And we'll modify our behavior based on what the customer is telling us."
Yesterday, J.C. Penney reported a net loss of $489 million in the third quarter, compared to a net loss of $123 million in last year's third quarter. Even so, Ullman said, the retailer is "on the right track" toward regaining profitability, with positive sales trends in the quarter including a same-store sales increase for the month of October--the first such monthly gain since December 2011. Ullman cited home--bedding, bath, window treatments and housewares in particular--as one of the departments leading this upward trend.