J.C. Penney dumps appliances
It’s not unusual for a new chief executive to step in at a company and go about downgrading or eliminating projects altogether that were near and dear to their predecessor’s heart. So, it probably doesn’t come as a big shocker that relatively new J.C. Penney CEO Jill Soltau has decided that the department store chain will no longer sell appliances after the end of this month.
Former CEO Marvin Ellison, who came from Home Depot, brought the category back to Penney in 2016 some 30 years after the chain had gotten out of the business citing the opportunity presented by a weakened Sears, which was bleeding share at the time. After an initial pilot at 22 stores in San Antonio, San Diego and Tampa, Penney declared the test a success and began rolling appliance departments out to more of its stores.
When Mr. Ellison abruptly left Penney to join Lowe’s last May, it sent a clear message that he had given up on a company that he once boasted was undergoing “one of the greatest financial turnarounds in retail history” under his leadership.
When Penney hired Ms. Soltau, former president and CEO of Joann Stores, last October, management was clear that it was looking to go into a different direction than it had with Mr. Ellison. Apparel category performance, which lagged under the former CEO, was a key factor in the decision to hire Ms. Soltau.
“We wanted someone with rich apparel and merchandising experience and found Jill to be an ideal fit,” said Paul Brown, the board director who chaired Penney’s CEO search committee, at the time of the hiring. “Not only is she an established CEO and former chief merchant, her depth of experience in product development, marketing, e-commerce and store operations have been an important basis for the turnaround work she spearheaded at prior companies.”
In a statement issued this week by Penney, the company said it would continue to sell appliances and offer free basic delivery and installation on purchases from $299 through Feb. 28.
The chain, which is also cutting back on furniture, said it is in the process of finalizing new store layout options with an eye to maximizing efficiencies, reducing inventory and create an enhanced shopping experience that inspires repeat shopping trips. With the space it has, Penney intends to focus more on higher margin “legacy strengths in apparel and soft home furnishings.”
- JCPenney Confirms a Reposition of its Home Department – J.C. Penney
- Can a new CEO revitalize J.C. Penney’s business? – RetailWire
- Will Penney’s appliance test put a fork in Sears? – RetailWire
- Ellison leaves Penney, fueling further doubts – RetailWire
- Has J.C. Penney pulled off ‘one of the greatest financial turnarounds in retail history’? – RetailWire
DISCUSSION QUESTIONS: Do you approve of J.C. Penney’s decision to dump appliances? Will focusing on its legacy strengths — apparel and soft home goods — be enough to revive the chain?