Penney has a need for supply chain speed

Discussion
Sep 11, 2015

Until now, the closest J.C. Penney has gotten to fast fashion has been the MNG by Mango store-within-a-store shops in 600 of its locations. But that may be in the process of changing as the chain has begun testing a fast fashion private label line and new CEO Marvin Ellison has made clear his intention to make Penney into a more nimble organization.

Belle + Sky, Penney’s new contemporary women’s line with items priced between $20 and $59.99, is currently being sold online with plans to add it to 100 of the chain’s stores this month.

The idea behind Belle + Sky is to move more quickly from concept to store than in the past. For Penney and others following traditional sourcing rules, the span is typically nine months compared to fast fashion chains such as H&M, Zara, etc. which are able to cut that to four months, according to Fortune.

Mr. Ellison is counting on a faster supply cycle to reduce costs and build demand for his private label offerings. According to the Dallas Morning News, he told attendees at a Goldman Sachs event that he was looking for private brands to grow and represent "north of 50 percent" of the chain’s sales.

J.C.Penney

Source: jcpenney.com

Penney is not the first major clothing chain to see opportunities in a faster supply chain. Gap Inc. has credited much of the success its Old Navy business has had with shortening the timeline between concept and stores. It was because of Old Navy’s success that Gap recently announced it was pursuing "a new product operating model to increase speed, predictability and responsiveness" as part of its efforts to improve performance.

Mr. Ellison is clearly tying his plan for turning Penney around to improved supply chain operations and omnichannel growth. The company recently hired Michael Armend, the former vice president of online, mobile and omnichannel for Home Depot, as its executive vice president of omnichannel. Penney also brought on Mike Robbins, the former senior vice president of global supply chain for Target, to lead its supply chain operations.

In the most recent quarter, Penney achieved a same-store sales gain of 4.1 percent but the increase was not great enough to push the company’s bottom line into the black. Penney’s stock lost 41 cents a share.

Will adopting a fast fashion approach significantly help to boost J.C. Penney’s apparel sales? How will a greater emphasis on supply chain affect the chain’s position in the marketplace?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I’m not sure that the JCP shopper is a fast fashion one. Wasn’t that part of the problem with many of the brands that Ron Johnson brought in? They didn’t resonate with the JCP shopper."
"Supply chain improvements increase profitability and ROI, but for this chain it won’t change the trajectory. JCP has a customer problem, a perception problem and a product problem. And all have already reached the tipping point."

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6 Comments on "Penney has a need for supply chain speed"


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Kelly Tackett
Guest
6 years 8 months ago

I’m not sure that the JCP shopper is a fast fashion one. Wasn’t that part of the problem with many of the brands that Ron Johnson brought in? They didn’t resonate with the JCP shopper. Can we differentiate between the two? Improving the supply chain and the fast fashion aesthetic?

Tom Redd
Guest
6 years 8 months ago

Fast fashion is a must win game. Supply chain platforms — from design to the manufacture to marketing — fulfil the wants of today’s shoppers. The supply chain space must change. While retailers have focused on the front of the store for the past four years, the supply chain has been sitting in the back room awaiting some love. So moving the supply chain to the front of the list will improve margins and customer satisfaction and decrease lots of retailer frustrations from end to end.

Focus on the supply chain and you can win any fight.

Gene Detroyer
Guest
6 years 8 months ago

Supply chain improvements increase profitability and ROI, but for this chain it won’t change the trajectory. JCP has a customer problem, a perception problem and a product problem. And all have already reached the tipping point.

Carol Spieckerman
Guest
Carol Spieckerman
6 years 8 months ago

The term “fast fashion” tends to elicit backlash (“Who is J.C. Penney to think it can compete with the likes of … ?”). A more relevant reference is “newness” and J.C. Penney could use some of that. Agility and supply chain speed is required to make it happen and the result is fresher fashion on a more frequent basis, which should beget more traffic and more sales at full price. A sensible plan for sure.

Alan Scheck
Guest
Alan Scheck
6 years 8 months ago

As Gene commented, “JCP has a customer problem, a perception problem and a product problem.” JCP has a steep hill to climb. Doesn’t this sound similar to the battle waged by Sears for years now?

Lee Kent
Guest
6 years 8 months ago

Love, love that J.C. Penney is looking to fast fashion. I personally think this fits their brand to a tee but they will certainly need some good, clever marketing to make it work. Not to mention a supply chain that can deliver.

But let’s not forget that a good supply chain is needed both externally and internally, to not only get concept to market but also to enable omnichannel success. What are all those acronyms? BOPIS, BORIS, BISPOS….

If J.C. Penney is headed for fast fashion, then their customer will expect every alphabet combination possible. Are they ready for that? Hope so!

For my 2 cents.

wpDiscuz
Braintrust
"I’m not sure that the JCP shopper is a fast fashion one. Wasn’t that part of the problem with many of the brands that Ron Johnson brought in? They didn’t resonate with the JCP shopper."
"Supply chain improvements increase profitability and ROI, but for this chain it won’t change the trajectory. JCP has a customer problem, a perception problem and a product problem. And all have already reached the tipping point."

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