J.C. Penney to Raise Bet on Private Brands
August 17 2016 - 6:20PM
Dow Jones News
J.C. Penney Co. outlined its long-term strategy, saying it will
step up its focus on exclusive and private brands such as Liz
Claiborne and St. John's Bay to drive growth.
At its analyst day on Wednesday, Penney said it expects
exclusive and private brands to comprise 70% of sales by 2019. The
company generated 52% of its merchandise sales from private and
exclusive labels last year.
The department-store operator has refocused on the brands after
former Chief Executive Ron Johnson's failed effort to reinvent the
chain phased some of them out.
"We've sharpened our priorities for the next three years,"
Chairman and CEO Marvin R. Ellison said. Penney said it is
targeting per-share earnings of $1.40 to $1.55 by 2019 and is
aiming for comparable sales to increase at a 3% compounded annual
rate. Penney reported an adjusted per-share loss of $1.03 last year
and expects to turn a profit this year on an adjusted basis.
The retailer's turnaround plan also includes increasing its
offerings of special apparel sizes and expanding its women's beauty
offerings, such as expanding the number of locations with in-store
Sephora shops. Penney plans to revitalize its home department,
including previously announced plans to resume selling
appliances.
The analyst day comes after Penney last week reported a narrower
quarterly loss and stronger sales for its latest quarter, a
departure from its department-store rivals.
Department stores have reported falling profits and lower sales
as shoppers are increasingly turning to discount chains and online
operators such as Amazon.com Inc. for their clothing and apparel
needs. In response, store operators have closed locations and
aggressively reduced expenses.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
August 17, 2016 18:05 ET (22:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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