J.C. Penney hopes for a home run with new launch
CEO Mike Ullman foresees growth in what has long been the retailer's worst-performing category.
By Courtney Reagan
J.C. Penney (JCP) hopes its new home products will boost flagging sales and help return the retailer to glory, the company's CEO told CNBC.
"We are very excited to be back where the home building business is picking up. Our dot-com business is likely to grow to over 50% home in the near future," Mike Ullman said Thursday.
Home goods have been the retailer's worst-performing category for seven years and have accounted for only 12% of its sales over the past fiscal year, compared with 21% in 2006.
But when asked whether its new home department could get the retailer back to where it was seven years ago, Ullman said it "gives us a chance to grow our business back to historical levels."
J.C. Penney's sales per square foot have fallen precipitously over the past year, but Ullman added that the higher price point of some of the designer home goods would help boost the key metric.
"Of course, (home) is a big space commitment. It's expected to earn its way," he said.
It's been a year since J.C. Penney revealed that Jonathan Adler, Michael Graves and Terence Conran would join previously announced Martha Stewart as home design partners, and two months since the merchandise began showing up at stores and online.
In what J.C. Penney called its "biggest home launch ever," over 500 of its 1,100 department stores now have new home "shops," and an additional 145 are selling the merchandise.
Graves is optimistic about the success his brand has seen at J.C. Penney during the soft rollout.
"We are really happy with selling 1,600 kettles last week, that's a phenomenal number, and we never did that at Target," he said.
The kettle he's referring to has been at the center of recent controversy -- with some Twitter users saying an image of the tea pot on a billboard looked just like Adolf Hitler.
On Thursday, J.C. Penney kicked off its new home launch in a traditional way… with a sale. Select home department items have been reduced by up to 40% until June 16.
Some analysts expressed concern over the higher price points of some of the new designer home goods, but Ullman isn't concerned. He likened the home "attractions" (the term he uses instead of shops) to Sephora, the first shops he brought into J.C. Penney stores in 2006.
"Sephora today is the most successful thing in the store," he said. "It's the only thing that grew last year, and was profitable last year in the store."
"So I think many of these attractions will have the same effect. People are going to come for the core which they are used to at J.C. Penney, and they are going to start to notice these things -- they are going to find out it's not as expensive as it looks."
Click here to read the full post.
More from CNBC
MSN Money on Twitter and Facebook
I too used to like to shop at JCP but not anymore! The selection of clothes is now targeted at the very young, tall and skinny person. I would NEVER wear any of that stuff let alone even try to wear it to work! Who wears a mid-ruff skirt to work?! Common on - that's NOT professional work attire! And what happened to the nice work clothes you used to carry??? JCP used to be the store to go to for work clothes but not anymore! It's quite a shame! And what's up with this Joe cool theme and the high end department store look?? You hardly have any merchandise, let alone a good size selection?! REALITY - you are NOT a boutique you are a department store - that was your BIG mistake!!!
JCP used to be the place to buy curtains and such - but that too has become a thing of the past! I went in recently looking for a nice displays of curtains (since it used to be the place to check out the latest fashions on trends) and that area was being re-modeled. And you no longer have catalogs. That ALWAYS had more options than the store could display and trying to match a color on-line just isn't the same as in person! ANOTHER HUGH MISTAKE for JCP!!! Bring back your nice curtain displays and not a Martha Stewart line like you were supposed to be getting! YUK!!!! You can get that at K-Mart - come on JCP!!! GET IT TOGETHER!!!!! Or you will be out of business before the end of the yr! You've lost WAY too many customers with your stupid changes just trying to make another buck and look where it's landed you - on the soon to be out of business list!
....as long as they get rid of Ellen and the gay dad's campaign......
I'll then return to JCP after refusing to shop there for the last 3 years.
Barbara...You more or less opened yourself up to this group and the remarks, gotta be careful..
Many of us have, severe or several problems, but don't expect JCP to cater to just us..Good Luck.
There are also signs on the windows and doors stating,
NO HOMOPHOBES or PUS-FACES ALLOWED...Go to WalMart or Target...
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The solid report comes a month after the retailer closed all of its Canadian operations.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.