NEW YORK (AP) — J.C. Penney is homing in on its home department as part of a bigger plan to turn its stores into mini-malls of sorts.
The struggling department-store chain is unveiling revamped home areas within its stores that feature 20 boutiques that highlight dozens of brands new to the retailer. The areas will include an eclectic mix of items, from $60 Michael Graves’ stainless steel teakettles to $1,850 Jonathan Adler “Happy Chic” sofas.
The home areas, which Penney’s will begin to roll out Friday at 500 of its 1,100 stores, are big tests of CEO Ron Johnson’s plan to open separate shops-within-stores for popular designers. The format have been popular at higher-end rivals such as Macy’s and Bloomingdale’s.
Penney’s hopes the new home areas will help it woo back shoppers as it struggles to rebound after it lost a quarter of its revenue and amassed nearly $1 billion in losses in the past year.
While home sections typically are among the least profitable of a department store, they help to drive customers into the store. And demand for home furnishings is rebounding along with the U.S. housing market: Sales of furniture and home decor reached $92.9 billion last year, up 7.8 percent from the low of $86.2 billion in 2009 during the recession, according to spending tracker MasterCard Advisors’ SpendingPulse.
“It’s going to be a struggle, but the home area could generate some momentum,” said Walter Loeb, a New York-based independent retail consultant.
But Penney’s, based in Plano, Texas, has its work cut out for it. Penney’s was planning to anchor its home areas with the Martha Stewart lifestyle brand. But the company is fighting in court with Macy’s over whether Macy’s has exclusive rights to sell certain Martha Stewart products.
Adding to that, Penney’s home business has lost considerable cachet from its heyday. The business once accounted for nearly 20 percent of Penney’s total store sales, but that number has dropped to 10 percent as it loses younger customers who update their homes more often.
Penney’s executives say the new sections will appeal to a broader group of customers. About 70 percent of the merchandise in the new home area will be new or retooled brands. To make room for the new labels, Penney’s got rid of long-standing names, including traditional home furnishing brand Chris Madden.
Among the new shops within the stores will be Bodum, a Denmark-based kitchenware company. Jonathan Adler, known for his whimsical designs in home decor, also will have a shop. And Michael Graves will showcase his minimalist style in kitchen and home accessories in mini boutiques.
“There’s something for everyone at any stage of their lives,” said Paul Rutenis, general merchandise manager for Penney’s home business.
Designer Adler said the shops will appeal to a broader audience beyond the high-end collection that’s sold at his own stores and in upscale retailers. Adler said his offerings for Penney’s have brighter colors and are “more playful” than his upscale collection.
As for Penney’s future, designer Graves says he’s focusing on what Penney’s will become. “I’m not at all worried. The change is going on. People will have to be patient.”