OPERATIONS

Martha Stewart helps Penney celebrate home department makeover

BY Marianne Wilson

New York — J.C. Penney Co. on Thursday took the wraps off its highly anticipated home department in more than 500 stores nationwide. The new department is made up of a collection of branded in-store shops, including Michael Graves Design, MarthaCelebrations, Happy Chic by Jonathan Adler, and Design by Conran. Each brand is presented in a boutique-like setting, with its own distinct look. The spaces range from about 300 sq. ft. to about 800 sq. ft. each.

(See photos)

Penney celebrated the home launch with a party Thursday night in Manhattan. The event drew some of the featured brands’ biggest stars, including hipster designer Jonathan Adler, famous architect Michael Graves and celebrated British designer Sir Terence Conran. But the biggest attraction was domestic diva Martha Stewart, who posed next to her colorful line of themed party goods, and also with Penney CEO Myron “Mike” Ullman. (Stewart, a very focal supporter of former CEO Ron Johnson, showed up despite that fact that she and Penney are still battling Macy’s Inc. over whether the Stewart/Penney partnership violates an earlier agreement Stewart had with Macy’s. A final ruling in the case is due within the next few weeks.)

Penney’s home center revamp was conceived by Johnson, and was a crucial part of his strategy to turnaround the ailing chain. And while Penney under Ullman is clearly putting a lot of distance between itself and Johnson, the home makeover remains crucial to the chain’s success going forward.

In a report by CNBC, JPMorgan retail analyst Matthew Boss said he was impressed by Penney’s new home shops.

“Personally, I was wowed by the stores in terms of the appearance, in terms of the product presentation, and the brands that are actually on the shelves,” he said. “So I think when the consumers see this for the first time they are probably going to be transformed and not believe they are in a J.C. Penney.”

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FINANCE

Sears Hometown Q1 profit falls 27%

BY Staff Writer

Hoffman Estates, Ill. — Sears Hometown and Outlet Stores Inc. reported a 27% drop in first-quarter earnings amid a cool spring throughout much of the country and rising costs. But the company, a spinoff from Sears Holdings Corp., pointed to improving signs in late spring.

Sears Hometown earned $15 million in the quarter that ended May 4, compared with $20.6 million in the year ago period.

Revenue dropped 3% to $601.1 million. Same-store sales fell 5%.

Bruce Johnson, CEO and president, said, "Sales were below last year due to the impact of unseasonably cool weather in February and March. Same store sales of lawn and garden, our second largest category, were down 45% in the first two months. We were pleased with the improvement during the latter portion of the quarter. With generally more moderate temperatures in April, same store sales for the category during that month were up 4.2%.”

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FINANCE

NRF: Father’s Day spending to rise slightly

BY Marianne Wilson

Washington, D.C. — Americans will spend a little bit more on dad this year, stretching their budgets enough to show their favorite man just how much he is appreciated, according to a survey by the National Retail Foundation.

The group, 2013 Father’s Day spending survey, conducted by BIGinsight, found that the average consumer will shell out $119.84 on dad’s gifts this year, up from $117.14 last year. Total spending for Father’s Day is expected to reach $13.3 billion.

According to the survey, those celebrating Father’s Day will spend $2.5 billion on a special outing, $1.7 billion on a new electronic gadget, and $1.8 billion on clothing.

Dad can also expect plenty of gift cards; families will shell out $1.8 billion on the perfect practical gift. Others will splurge on home improvement and gardening tools ($755 million), sporting goods ($710 million), personal care items ($707 million), and even automotive accessories ($592 million).

Department stores remain the preferred shopping location for gift buyers: four-in-10 (40.6%) will look for dad’s gift there. Others will shop at discount stores (31.5%), specialty stores including greeting card/gift and electronics stores (27.3%), and specialty clothing stores (9.9%). Online retailers will see a slight increase in traffic this year; 29.8% will shop online, up from 28.4% last year.

On the digital front, two-in-five (20.3%) of those who own a tablet plan to use their tablet to make a Father’s Day purchase. Overall, more than half (51.1%) of tablet owners will use their device to research products and compare prices, redeem coupons and look up retailers’ information such as store hours and location. Four-in-10 (42.6%) smartphone owners will use their mobile device to research the perfect gift idea and compare prices and look up store information.

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