Private Label Buyer

New CEO Promises Return Of Private Labels To JC Penney

May 17, 2013

In his first conference call with analysts since re-taking the CEO position at JCPenney, Mike Ullman said the struggling retailer would restore private labels as part of its rebound strategy.

The company reported sales falling 16.4 percent in the fiscal first quarter from a year ago, with same-store sales down 16.6 percent. Ullman said on a call with analysts that traditional private brands are the core of the company’s business and had been under emphasized in the past year.

“From my perspective, JC Penney has made very good progress over the last 18 months, improving how our stores look and how our brand assortments like Joe Fresh and Happy Chic by Jonathan Adler look in our stores,” he said on the call, according to transcripts from Seeking Alpha. “Our plans for these and other new brands is to be available J C Penney alongside several newly restored private brands, as I mentioned, particularly the $1 billion St. John’s Bay women’s sportswear brand and Arizona as well as the exclusives like Liz Claiborne, each of which has been updated with exciting styles. “

A Reuters report from March said JC Penney’s private brands accounted for more than half its annual sales. Ullman mentioned often on the call that St. John’s Bay would quickly be returned to its previous inventory and sales.

“I think that the way I would think about is the biggest bucket we have is that private brand business, which I would call the core brands,” Ullman said, according to the Seeking Alpha transcripts. “The middle bucket would be the national brands, where we compete head to head with our competitors and manufacturers … and we don’t expect to be disadvantage there. If anything we have … assortments that are superior to similar competition.

“ The third category would be what I would call attractions … things when they turnaround from shopping the core, they see Sephora, they see Liz Claiborne or Joe Fresh these are ideas in aspirational products that make the shopping experience more balanced in terms of what she might be looking for. And it stimulates increased business and increase spend. So … I think it’s an allocation of how much to the core, how much to the national brand.”

And in that respect, Ullman said St. John’s Bay was not the only focus for returning private labels to shelves.

“I think it’s fair to say we have three or four private brands that we know there’s demand for that we want in business in those brands,” he said. “So they’re coming back and the customers already experienced that.”