Update on J.C. Penney, from Joe Fresh to Free Haircuts

I’ll say this for Ron Johnson: He has turned staid J.C. Penney into the most talked-about retailer in the nation. The company accounted for five of the 10 most-viewed stories on this website in the first half of 2012 (see story). And industry analysts and consultants can’t stop speculating on the chain’s fortunes, in print, on the web and on television.

In a way you can’t blame them. The fact is there is a lot of news coming out about J.C. Penney. Every day seems to bring a new story (or a new rumor). So here’s a recap of some of the most recent developments:

• Joe Fresh, the Canadian cheap-chic retailer, has entered into an agreement to roll out in-store shops next spring in approximately 700 J.C. Penney stores nationwide.

The brand, which is owned by Loblaw Cos. Ltd., operates only a handful of U.S. stores, all of them in the New York metro area. The deal with J.C. Penney provides Joe Fresh with a great opportunity to expand its footprint here not only very fast, but also in a very cost-efficient manner.

“To get this many stores this fast is a real vote of confidence on both sides. It’s a really bold move for a Canadian brand retailer to make in the United States. I would go so far as to say it’s the boldest,” said Wendy Evans, president of Evans & Co. retail consultants in Toronto, in a report by the Toronto Star.

The Joe Fresh shops will be allotted from 1,000 to 2,500 sq. ft. in each J.C. Penney store and the potential for more if it does well, the report said.

• More details are coming out about the branded shops that Johnson plans to roll out, with the first batch debuting in time for this year’s back-to-school shopping season. (The ultimate plan is to have 100 branded shops inside the stores by 2015.) The branded shops will come in three different formats: “boutiques” (the smallest, at under 750 sq. ft.), “shops” and “stores” (the largest, at over 1,400 sq. ft.)

• Denim is the focus of the first batch of shops being rolled out, with the Levi’s, Arizona and Jeans by Buffalo brands get their own niches in some 700 J.C. Penney stores by Aug 1.

The Levi’s shop, as seen in the J.C. Penney store at Manhattan Mall, New York City, includes 11 cuts and 88 washes of jeans and is staffed with Levi's fit specialists trained J.C. Penney and the denim maker, according to a report by Advertising Age. IPads flank the sides of Levi's men's denim bar, with the devices to be used for mobile checkout and informational purposes.

In September, J.C. Penney will open an Izod shop (for men), a Liz Claiborne shop (for women) and jcp shops (men's and women's) for its own namesake brand. The plan is to add a couple of shops every month.

• Expect Johnson to give the stores a cosmetic makeover in the way of better lighting and less clutter all around. And the individual shops will have their own fixtures and signage.

• As part of its back-to-school enticements, J.C. Penney's on Aug. 2 will offer free haircuts in its salons for kids in kindergarten through the sixth grade. For each cut that day, the retailer will donate $1 to the Boys and Girls Clubs of America and 4-H.

The offer continues through August, as space allows.

More As I See It entries.


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