Johnson: JCPenney creating a new class of department store
Casual Living Staff -- Casual Living, August 10, 2012
New York - There are promotional department stores like Kohl's and high-end department stores like Bloomingdales, but JCPenney is transforming itself into a new and distinct entity: the specialty department store, ceo Ron Johnson told analysts here early this morning.
"We are going to be an entirely new class of department store," he said.
For the first time, Johnson provided details about The Street (originally called Main Street) and Town Square concepts that will be part of the new store model.
The Street, the primary thoroughfare around the store, will be nearly 15 feet wide and run for nearly a half mile. The number of check-out stations in the store will be reduced from 10 to four - one each in home, women's, men's and chldren's. Eliminated stations will be replaced by comfortable chairs where shoppers can relax.
Along the pathway, the street will be studded with trend-right mannequins, coffee bars, juice bars, and tables equipped with iPads shoppers can use to browse the Internet. As The Street passes various shop-in-shops, it will offer activities related to the area's merchandise.
"We will have 50 different and unique activity points," said Johnson.
The Square, located in the center of the store, will be the focus for seasonal goods and will be reset every two months. It will also offer light food and beverages and feature activities such as ornament-making and holiday card-marketing in November/December, switching to pilates and yoga classes in January/February with an emphasis on fulfilling New Year's resolutions, he added. Food and beverage selections will also change with the seasons.
The first stretch of The Street will open next spring with the rollout of the new home department. Johnson reiterated several of the brands previously announced for home department shop-in-shops - Martha Stewart, Michael Graves, Jonathan Adler, among them - but did not elaborate their content.
By the end of this year, JCPenney stores will be set with 12 shops. By holiday 2013, the company will have rolled out 40. In the Levi's shop-in-shop - one of three JCP opened Aug. 1 - merchandise sales are up 25% over last year, Johnson reported.
JCPenney will open a fully fleshed out prototype store in fall 2013, said Johnson. He did not identify where it will be built.
As expected, the 1,100-unit retail had another difficult quarter. Net loss for the quarter ended July 28 was $147 million, or 64 cents per share compared to net income of $14 million, or 7 cents per share in the year-ago quarter.
Sales tumbled 22.6% to $3 billion. Internet sales fell 32.6% to $220 million. Comps dropped 21.7%.
For the six-month period, the net loss was $310 million, or $1.42 per share, compared to net income of $78 million, or 35 cents per share, in the first six months of the previous fiscal year. Sales declined 21.3% to $6.17 billion.