I remember a JCPenney store being on the square in my small town in Indiana when I was a child. On special occasions we were able to shop there to buy new tennis shoes or a nice dress for Easter.
Fast forward twenty years… I don’t know the last time I was in a JCPenney’s. They are still around, yet have lost their luster over the years. That is likely why the new CEO, Ron Johnson, is completely revamping the experience at the dated department stores. The former Apple exec knows what it takes to run a successful company. On Wednesday he laid out an ambitious business plan, including turning stores into a collection of specialty shops, turning the popular center selling area into an entertainment space, and touting lower prices every day rather than offer multiple sale after sale.
More and more department stores are setting up “stores in a store” and carving out areas for specific brands. Mr. Johnson, plans on including branded spaces like a new “Martha Stewart’s Kitchen,” private-label stores for the company’s Liz Claiborne line, and themed areas.
Furthermore, the new CEO also plans to replace the “center core”, the highest traffic middle area where department stores typically concentrate high-margin impulse buys and cosmetics, with what he calls “Town Square.” The section will be approximately 10,000 square feet and rotate monthly attractions and services, such as free haircuts during back-to-school season or free hot dogs and ice cream in July.
The final piece in the overhaul is that the price promotions will decrease dramatically, as many customers have seen advertised in the new JCP commercials. Penney’s will pick a number of in-season items that will be on sale for an entire month and will have two clearance sales, on the first and third Fridays of the month. Prices will be expressed in flat dollar amounts without cents and they plan to slash initial prices on merchandise by 40%.