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J.C. Penney checks into its newest business — hospitality


A department store chain is pursuing a new business opportunity in a $200 billion market.

J.C. Penney is now offering business-to-business solutions for the hotel and lodging industry, as well as the multi-unit residential industry. The retailer has launched a program to supply hotels, vacation rentals and properties managed by commercial property groups with blankets, pillows, towels, window treatments and even major appliances. Penney is putting together an outside sales force for the initiative.

“The U.S. hospitality industry represents approximately $200 billion annually — and a significant opportunity for J.C. Penney to gain market share and drive increased revenue per customer with major appliances and a renewed focus on soft home goods," said Marvin Ellison, the chain’s chairman and CEO. "Our entry into the B2B program reinforces our home refresh initiative, while providing new and innovative ways to achieve sustainable growth and profitability. Our broad assortment of private brands in soft home give us a unique cost and value advantage in this new and exciting space."

The new B2B program utilizes Penney’s nationwide fleet of brick-and-mortar stores and its vast supply chain. It also benefits from the retailer’s experienced sourcing organization. By hedging raw materials, working with a strong supplier base in over 30 countries and implementing a rapid production cycle time, Penney can gives business clients “the assurance that they are receiving the best quality products when they need them,” the company said.

“The move to B2B makes a lot of sense,” said Maureen Mullen, chief strategy officer at consumer brand consulting firm L2, told MarketWatch in a phone interview. “For one, [J.C. Penney] is entering an area that Amazon is not playing.”

The initiative comes at a critical time for Penney. The retailer got off to a slow start in its first quarter, reporting disappointing sales.

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