JCPenney (JCP) and its peers delivered disappointing sales figures for fiscal 2016, which ended on January 28, 2017. For fiscal 2016, JCPenney’s sales were down 0.6% to $12.5 billion, and its same-stores were flat. The fiscal 2016 sales of peers Macy’s (M) and Kohl’s (KSS) fell 4.8% and 2.7%, respectively.
Nordstrom’s (JWN) revenues rose 2.2% in fiscal 2016. Although the company’s full-price stores continued to disappoint, its off-price stores and online channels were the key sales drivers.
Sales growth initiatives: Sephora
JCPenney (JCP) has been taking several initiatives to improve its sales. A focus on its Beauty segment, mainly Sephora, is one of the company’s key growth strategies. Sephora is owned by the luxury group LVMH Moët Hennessy Louis Vuitton SE (LVMUY) (MC.PA).
JCPenney opened 61 new Sephora locations and operated 577 Sephora stores within JCPenney locations by the end of fiscal 2016. The company plans to open 70 new Sephora stores in fiscal 2017. JCPenney also intends to expand 32 highly productive existing Sephora locations and enhance the product offerings in these stores.
The company’s Home division is also a vital source of growth. In fiscal 2016, JCPenney enhanced its Home segment by bringing back home appliances in a number of its stores after a three-decade hiatus.
In the 4Q16 conference call, JCPenney’s CEO, Marvin Ellison, stated that the company plans to open 100 new appliance showrooms in early 2017. The company is also planning to add new brands to its appliance showrooms in 2017.
Expanded merchandise selection
JCPenney could continue to expand its merchandise offerings. In the Women’s segment, JCPenney plans to have Nike (NKE) offerings in every store in fiscal 1Q17. The company also plans to include Adidas (ADDYY) apparel in the Women’s division in more than 100 stores in March. JCPenney aims to have Adidas apparel in more than 400 stores in time for the back-to-school season. The company also plans to enhance its plus-size offerings in the Women’s segment.
JCPenney also plans to focus on its online sales. In the 4Q16 conference call, Ellison mentioned plans to enhance the online SKU[1. stock keeping unit] assortment by more than 140% in fiscal 1Q17 on a year-over-year basis.
We’ll discuss JCPenney’s stock price movement in the concluding part of this series.