OPERATIONS

J.C. Penney reverses course: to stop selling appliances, pulls back on furniture

BY Marianne Wilson

J.C. Penney is exiting a business it expanded significantly under former CEO Marvin Ellison.

In a blog post, the department store retailer said it will stop selling major appliances, effective Feb. 28, in order to” better meet customer expectations, improve financial performance and drive profitable growth.” Penney is also scaling back on furniture, and will make the category available only online and in select stores in Puerto Rico. (Mattresses, however, will still be sold at some 400 Penney stores and online.)

The moves, which represent a repositioning of Penney’s home department, are the first major change under Jill Soltau, who was appointed CEO in October 2018. Penney exited the appliance category in the early 1980s. It resumed selling the merchandise in 2016 under the leadership of Ellison, who was hoping to capitalize on the void left by shuttered Sears stores. Ellison, who left Penney in July 2018 to become CEO of Lowe’s, launched appliance “showrooms” in Penney stores that ranged from about 1,000 sq. ft. to 4,800 sq. ft. He also tested several home services concepts.

In its blog, post, Penney said it is freeing up the space dedicated to appliance and furniture to “maximize efficiencies, reduce inventory and create an enhanced shopping experience that inspires repeat shopping trips.”

“Optimizing the allocation of store space will enable us to prioritize and focus on the company’s legacy strengths in apparel and soft home furnishings, which represent higher margin opportunities,” Penney stated.

Shoppers who purchase appliances in stores and online through Feb. 28 will still receive free basic delivery and installation on new models priced above $299. And all protection plans and manufacturer’s warranty agreements will remain in effect for the applicable warranty period.

Penney will provide more details about its decision to get out of the home appliance business when it reports earnings Feb. 28.

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