Same-store sales growth
JCPenney’s (JCP) turnaround efforts that commenced in 2013 have helped improve its same-store sales. After falling by 25.2% in fiscal 2012 and by 7.4% in fiscal 2013, JCPenney’s same-store sales grew by 4.4% in fiscal 2014 ended January 31, 2015.
The improvement continued in the first two quarters of fiscal 2015. JCPenney’s same store sales grew by 3.4% and 4.1% in 1Q15 and 2Q15, respectively, on a year-over-year basis.
Comparison with peers
JCPenney’s same-store sales growth in fiscal 2014 was ahead of its department store peers. In fiscal 2014, Macy’s (M), Nordstrom (JWN), and Dillard’s (DDS) reported same-store sales growth of 0.7%, 4%, and 1%, respectively. Same-store sales of Kohl’s (KSS) and Sears Holdings (SHLD) declined by 0.3% and 1.8%, respectively, in fiscal 2014.
Efforts behind the improvement
The improvement in JCPenney’s same-store sales has been a result of several initiatives like:
- offering consumers a right mix of private and national brands
- expansion of the Sephora store-within-a-store business
- an omni-channel approach which benefited both store and internet sales
- reinventing the Home department, including launching the Home catalog in spring 2015
- increasing store traffic through JCPenney beauty salons
- According to JCPenney, a beauty customer tends to visit the store eight times a year and spends twice as much per visit as the average customer. In February 2015, the company entered into a collaboration with the editors of InStyle to modernize its salons and rebrand them as The Salon by InStyle.
- enhancing center core products, like shoes and fine jewelry
- making the kids section attractive by opening more in-store Disney shops
JCPenney has been making some interesting additions to its merchandise assortment. For instance, in April 2015, the company partnered with actress Eva Longoria to launch an exclusive bedding collection in over 100 JCPenney stores and on its website.
In September 2015, JCPenney partnered with football star Michael Strahan to launch an exclusive brand of men’s tailored clothing, dress shirts, neckwear, and accessories. This debut clothing line is available in over 200 JCPenney stores and on the company’s website.
JCPenney is presenting its version of fast fashion by piloting a new brand called Belle + Sky, a line of fashionable women’s wear. Fast fashion represents designs based on the most recent trends, which can be sold quickly. JCPenney’s pilot fast fashion brand should help it compete with popular brands like H&M and Forever 21.
JCPenney makes up 0.1% of the portfolio holdings of the Vanguard Consumer Discretionary ETF (VCR).