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Penney’s New Home Makeover

J.C. Penney has a lot riding on its new home department makeover. Industry analysts say the revamp, a central element of former CEO Ron Johnson’s plan to transform the chain, is critical to the department store’s future. Home represented 12% of Penney’s sales in 2012, down from 15% in 2011. It was the worst performing category last year.

It’s too early to predict, of course, how the new merchandise will fare with Penney customers. Some of the price points may be too high, particularly the furniture in the Happy Chic by Jonathan Adler collection. The same goes for the furniture in the Design by Conran furniture. While both lines are well designed, I’m just not sure that Penney customers will take to the upmarket prices or the stylings, which may be too sophisticated (Conran) or too whimsically-hip (Adler). As for that infamous “Hitler” tea kettle from the Michael Graves line, it sells for $40 and is on backorder, with a promise ship date on or before the end of August. See what a little viral buzz can do!

One thing customers are going to like is the chain’s renewed emphasis on promotions. To support the launch, Penney is offering 20-40% off on select items throughout the home department, plus an extra 10% off on purchases made June 6-June 9. Customers who sign up for JCP Home text alerts receive a $10 off $30 coupon.

Overall, the influx of the new merchandise into Penney is a breath of fresh air. And the presentation of the brands in the stores is first rate, with updated flooring, accent lighting, custom fixtures, and wider aisles.   

In a report entitled “High Hopes for Home: Highlights from JCP’s Home Launch Event,” Citi Research analyst Deborah Weinswig said she was impressed with the product quality of the new home merchandise. And while she noted that many of the brands are offered at the company better/best price points and above the average price point in home, she believes that the return to traditional promotional pricing will help sell-through rates.

In the same report, Weinswig brought up another important point: “With the launch now behind it, JCP can focus on remerchandising the store, rebuilding inventory levels, marketing to loyal customers, and reinvigorating online,” she wrote.


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