J.C. Penney is certainly in fashion when it comes to Wall Street. The department store chain, which managed to post gains during a tough holiday season when its rivals did not, has investors jumping on its bandwagon as it continues a turnaround from one of the great management debacles in retailing history (see Ron Johnson). While there are certainly positives to point at, Forbes contributor Walter Loeb has written that it will all amount to very little if Penney doesn't find a way to improve its performance in the apparel category.
In his column, Mr. Loeb writes that Penney, like other department stores, is dependent on fashion categories to achieve sustained growth. But the chain is challenged to come up with lines that consumers, particularly Millennials, want to buy. He notes that these younger consumers are in no hurry to refashion their wardrobes. Right now, Penney is losing in this area to fast fashion specialty chains such as Forever 21 and H&M.
Back in 2009, Penney had turned to Mango, the Spanish fast fashion retailer, to help attract Millennials to its stores. This December, the relationship between the two came to an end when Mango announced it was closing all 450 MNG by Mango shops inside of Penney stores.
Mr. Loeb does not think that Penney private labels, such as St. John's Bay and Stafford, are likely to connect with Millennials. Penney needs something fresh and that's where its new chief merchant John Tighe comes in. Unfortunately, the changes made by Mr. Tighe will not be clear for more than a year. What happens in the meantime will say a lot about Penney's future prospects.