JCPenney furniture turnaround
Carole Sloan -- Furniture Today, January 5, 2005
NEW YORK -- With the success of the furniture portion of its new Chris Madden Home collection, department store JCPenney believes it has turned around its furniture business and will record double-digit sales increases for 2004, with further gains expected in 2005.
"The furniture business has been restructured and turned around," said Charlie Chinni, executive vice president of home, fine jewelry and family shoes. "The assortment now focuses on fashion, quality and promotion."We've moved the top line up and the bottom line is coming along with it," he said. "We hope that in 2005 we will deliver bottom-line profit."Sales gains in 2004 come on the heels of a strong 2003 performance, when JCPenney racked up $665 million in furniture and bedding sales, a 13.1% improvement over 2002. It long has been the No. 1 department store seller of furniture and bedding. Chris Madden Home was launched in spring 2004, and Chinni said furniture was "the No. 1 surprise in its success. It beat plan by more than any of its peer home departments, and the furniture assortment for 2005 will be expanded on a percentage basis more than any of the other departments in the home furnishings division."Chris Madden Home could very quickly become two-thirds of the total furniture assortment by the end of 2005," he said.He attributed much of the line's success to "the credibility of Chris" as a designer, author and columnist.
As sourcing moves offshore, Chinni said, "I'm very happy with the supply/delivery/quality equation in furniture. We don't have concerns."Another positive for JCPenney is furniture's growing strength in its catalog and Internet channels. Chinni said furniture is one of the fastest-growing businesses in those channels, even though there is a different customer mix and generally lower price points."One of the wonderful things about direct marketing, especially the Internet, is its ability to develop newness and trends and winners," he said.All of JCPenney's bedding complies with the more stringent fire-safety regulations that took effect in California on Jan. 1, Chinni said.Furniture now is in 172 Penney stores, "and 500 are big enough to have furniture," he said. "We have an opportunity to expand there, and we have a commitment to the furniture business. But the model has to be very secure on both the top and bottom lines."
The company has just over a thousand stores.
Looking ahead, Chinni sees two major challenges for the home business. "The competition is heating up as other retailers continue to try to make home a traffic builder;" he said.Secondly, and perhaps more significant, is the changing consumer. "Clearly, customers are spending their dollars differently," Chinni said. "We will continue to grow and deliver unique new categories and items to enhance personal lifestyles, including entertaining, decorating, wellness, health and physical activities."The emphasis in home "will be on newness versus commodity and price," he said.
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JCPenney furniture turnaround
Jan 16, 2005
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