JCPenney unveiled a new lifestyle store in Hurst, Texas on November 1. This store is brand-redefining and reflects the new management’s strategy to put customers at the center of the business. It tries to reflect what today’s shopper wants from retailers. A year of extensive customer research led to the insights that formed the new store strategy. It is all intended to transform traditional stores and is at the center of JCPenney CEO Jill Soltau’s plan to rebuild and renew the company.
From the moment customers walk into the store they will find that the merchandise assortment is built and organized around how they live and the many occasions in their day. No more departments set up just by classification. Brands are curated for how customers want to shop. Thus, CEO Jill Soltau has built a store that is consumer-centric and brand-defining.
The different areas are defined as follows:
- All Day for casual work wear and weekend wear.
- On Point for when customers want to be more refined and polished.
- Move for everything from low to high impact.
- Chill for stylish great lounge and sleepwear.
- Shine for very special occasions.
In addition, there are lounges scattered across the store and special service areas for shopping as well.
- All-You for fashion jewelry and accessories, Sephora, and the Salon & Spa.
- The Barbery for a fresh cut, shave, and shoe shine.
- Styling Rooms for women and men with innovative technology.
- Movement Studio for health and wellness with instructor classes.
- Shutterfly Picture Pop Selfie Studio for capturing family moments.
- Pearl Cup Bistro or Pearl Cup Grab + Go for refuel or quick meals.
There’s another interesting service offered as well. The company has partnered with Pinterest to help customers who want to remodel their home to find ideas through an “in-store style explorer.” It is expected that customers will answer a few home décor questions and then will be presented with a Pinterest board featuring JCPenney home products that meets their style. This is a very important sales tool for an area that has 24% of total store sales volume. MORE FOR YOU‘No Christmas Trees, No Christmas Trees’ Another Shortage May Be On The WayThe Grocery Business Is Going To Get Much More CompetitiveCostco Addresses Supply Chain Pains By Chartering Their Own Ships
One can assume that “All Day” will be the leading selling area with all women’s and men’s sizes in one area. The customer will find merchandise she and/or he likes in coordinated and relevant assortments.
Reflecting attention to lifestyle, the company will have outdoor shops in about 100 JCPenney stores featuring its own St. John’s Bay brand. It also is emphasizing its own brand, ANA, and Levi as key brands. At the same time, the company has partnered with ThredUp to sell secondhand clothing. Soltau emphasized that JCPenney is about style and fashion, so it is trying to make it easy for customers to put styles together any way they want.
The focus is on rebuilding the company. Management indicated it is comfortable with its liquidity position to accomplish that growth. They indicated that they have been very active to ensure that they continue to have the cash and liquidity needed as they move forward. Capex has declined to a projected $300 million to $325 million from $382 million last year and $427 million in 2016. The current changes do not require capital, but rather some labor and good signage. Nonetheless, it has been reported that the company has started to meet with lenders to restructure its debt and to postpone maturities. JCPenney has about $1.75 billion in liquidity. It can handle near-term payments but it has about $2 billion of its $4 billion longterm debt due in 2023. I believe that the company will have the support of the industry and banks to extend the loans.
The new store in Hurst, Texas, has another distinctive feature. You will see it has a script “Penney’s” name across the mall entrance. That is a change in brand look that is new and different. In addition, the press releases eliminated the dots between J, C, and Penney. I have adopted the new identification in this report, but regret that it reminds me of Ron Johnson, who also played around with the name. However, I am enthusiastic about Jill Soltau’s approach and can get past that comparison. While I do not expect great results when the company reports its 2019 Q3 results on November 15, I am more optimistic about the fourth quarter results of 2019 and the results for 2020.