JCPenney will test furniture in off-mall store
By Carole Sloan -- Furniture Today, May 7, 2007
Plano, Texas — Furniture is only in about 160 of JCPenney's more than 1,000 stores, but the company plans to leverage its presence in the category with sales via catalogs and its fast-growing Internet business, according to a top executive of the retailer.
Jeff Allison, executive vice president, home and custom decorating, also revealed that the company will be testing furniture next year in an off-mall store, a type of unit that is a key driver in Penney's aggressive expansion plan. The test will take place in a 6,000-square-foot department at the Fairview Mall store in metro Dallas.
"We're adding to the size of the store to see if we can get the concept to work," Allison said. "We would like furniture to be in additional locations. We think it can be viable in select locations."
In an interview after the company's annual analysts meeting earlier this month in Fort Worth, Texas, Allison said he's "excited about the potential for furniture." He said JCPenney is seriously evaluating the category. "We're working to get to the right level of case goods and upholstery," he said.
Also under scrutiny are the Chris Madden for JCPenney Home Collection and the Studio for JCPenney Home Collection, the traditional and modern statements, respectively. "They're not nearly as crisp as they can be," Allison said.
He also said the company is looking at putting kiosks in stores that don't carry furniture, as a means of drawing consumer attention to the wide selection of furniture offered on the Internet.
And next year, JCPenney will launch American Living, a store-wide merchandise and marketing program, created in conjunction with Polo Ralph Lauren. The program, the largest launch in the company's history, will be "a very important anchor in home, and aspirational in price points," Ken Hicks, president and chief merchandising officer, said at the analysts meeting.
Furniture will be an important segment, but along with housewares will roll out later than the rest of home, Hicks said.
Myron "Mike" Ullman III, chairman and CEO of Penney, said at the meeting the company was exceeding its sales and profit targets.
But he said the growth plan isn't just about posting good numbers. Ullman said the company aims to intensify customer relationships and "increase associates' engagement and retention" — the latter a key means to growing the business.
Penney also plans to open 250 stores from now through 2011, amounting to an 18% growth in square footage, said Michael Dastugue, senior vice president, property development. At the end of that time, the company will have 1,200 stores.
He said the retailer also plans to renovate 300 stores within that period, including 65 this year. Currently, 45% of the company's stores are new or renovated, and the goal for 2011 is 80%.
Two markets that will be a focus of new store growth are Chicago and Houston, Dastugue said. Houston will have two new stores this year and three more by 2011. Chicago "will have an aggressive opening of six this year, three next year and more in '09 and beyond," he said.
A key to Penney's growth and success is its improved sourcing and design capabilities, said Peter McGrath, executive vice president, product development, design and sourcing.
"We now can react to fashion changes in season, and we have improved turns, markdowns, and gross profits," he said.
