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Has J.C. Penney figured out a fix for its fashion problem?

May 16, 2017Written by George Anderson

Photo: J.C. Penney

Same-store sales at J.C. Penney have declined for four of the past five quarters and weakness in the chain’s clothing sales has been a consistent drag on performance. While Marvin Ellison, Penney’s CEO, doesn’t expect the chain will move its business into positive comps quickly, he did cite reasons for optimism on an earnings call with analysts last week. On the call, Mr. Ellison said he was pleased with the chain’s sales of active apparel and dresses. “Improvements in these apparel categories bode well for the balance of 2017, as these items become a much larger piece of our business moving forward,” he said. Mr. Ellison said that although men’s, women’s and kid’s apparel performed below the overall comp for the company in the last quarter, Penney did see sales tick up in March and April compared to February. Women’s apparel, he said, “delivered the best comp trend improvement from Q4 of last year to Q1." “Broadly speaking, we're pleased that our new apparel strategy, highlighting inspiring trends at a value, performed well in the casual and contemporary categories of women,” said Mr. Ellison. Many new items in these categories launched in the spring had already sold out, he added. Mr. Ellison said the chain was now challenged to build on its recent successes in women’s apparel and extend it to kid’s and men’s clothing, as well. Activewear is a segment in which Penney is looking for growth across the board. He cited an enhanced partnership selling Nike apparel and footwear in 600 stores as well as plans to have Adidas in over 400 stores for back-to-school. John Tighe, Penney’s chief merchant, said the chain is becoming “more nimble” in the apparel category. “Last year, we reorganized our whole process for product development and design, and in some areas, reduced it by over 40 percent from where we were,” he said. “This is allowing us to be much faster to market and be more trend-right and allowing us to really deliver the right trend and value at the timely basis.”

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