Penney’s apparel business is largely back on track, and its e-commerce has begun to recover, one area is still lagging badly: its home goods department. Photograph by George Crouter - Denver Post via Getty Images Home is where the turnaround is employees preview a new Penncrest refrigerator at a regional meeting in 1965. He made a point of saying Penney is not taking on his alma mater, Home Depot, saying that the two retailers have very different customers and store locations. “Because of that, we’re going to try to win in the mall.”Īnd in those malls, one retailer in particular (read, Sears) has been “dominating” market share, Ellison said. “We’re accepting the reality that we’re a mall retailer. The “Silver” project will be closely watched by Penney investors because it will be the first major test of Ellison’s strategy, which eschews major makeovers in favor of Penney striving to be the best version of itself. Penney plans to offer a much bigger assortment online once it makes appliances available for sale on jcp.com in May, said chief merchant John Tighe. The appliances will range in price from $349 to $3,499, while the dedicated appliance sections on the sales floor will be between 1,500 square feet and 3,700 square feet. Though Sears Holdings, the parent company, remains the top retailer of home appliances in the United States, with sales of more than $4 billion last fiscal year, helped by leading brands including its own Kenmore line, Sears has been bleeding sales for years and has closed hundreds of stores. Instead, those shoppers are buying appliances at Sears, (SHLD) a department store with which Penney co-anchors 456 malls, according to Green Street Advisors. “Over one-third of our customers buy appliances in the mall,” Ellison told Fortune, surrounded in a mock-up showroom by dozens of LG dishwashers, GE fridges and other such items. In a third-party analysis of items that Penney customers searched for on jcp.com but were unable to buy there, appliances ranked number one. In an exclusive interview at Penney headquarters in Plano, Texas in early January, Ellison explained the decision to focus home appliances, a category he oversaw during his 12-year stint at Home Depot. JCPenney Archives, DeGolyer Library, Southern Methodist University Penney sold appliances from 1963 to 1983 under its own brand, Penncrest, before abandoning the category to double down on its apparel business.Ī J.C. That is still more than $4 billion below their level four years ago.Įnter “Silver,” Penney’s internal code name for its appliance project. But for all of Penney’s progress, Wall Street only expects the retailer to clock in sales of $12.6 billion for the fiscal year ending this month. Penney is gradually clawing back after a disastrous reinvention in 2012 that alienated its frugal core customers and cost it a third of its revenues. Notably, Penney’s holiday results were a clear outperformance of department store rival Macy’s (M), which saw a big drop in sales. Penney’s comparable sales during the 2015 holiday season rose 3.9%, putting it on track for its ninth straight quarter of growth. The return to home appliances is the first major new initiative by former Home Depot (HD) senior executive Marvin Ellison since he took the reins as chief executive officer last August, and one he is betting will help Penney build on its promising recent comeback. 1 in stores in the San Antonio, San Diego and Tampa metro areas, Penney could roll out the home appliance offerings to hundreds more stores by October. If all goes well with the pilot, which begins Feb. For the first time in 33 years, the department store will be selling home appliances like refrigerators and washing machines by General Electric (GE), Hotpoint, LG and Samsung, at 22 of its roughly 1,000 stores.
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