Collaboration with Fanatics
On June 7, JCPenney (JCP) announced its partnership with Fanatics—a leading licensed sports merchandise retailer. Under the partnership, JCPenney will launch Fanatics shops in 325 JCPenney stores. The shops will offer merchandise for local college and professional sports teams. JCPenney plans to launch an additional 325 Fanatics shops by the back-to-school season.
JCPenney partnered with Fanatics in 2014 to offer an extensive range of team apparel through the online Sports Fan Shop on JCPenney.com.
Efforts to improve sales
JCPenney has been working to improve its top-line growth amid a highly competitive environment. Online retailers like Amazon (AMZN) are grabbing traditional retailers’ market share. In the fiscal first quarter, which ended on May 5, JCPenney’s net retail sales declined 4.3% on a year-over-year basis to $2.6 billion. The company’s same-store sales grew 0.2% in the fiscal first quarter. Investors were disappointed with the dismal sales numbers. As a result, JCPenney stock fell 12.4% on May 17. In contrast, Macy’s (M) sales grew 3.6% in the fiscal first quarter.
JCPenney has been looking for growth opportunities in several merchandise categories aside from apparel. The company has been focusing on its beauty business, which includes the Sephora in-stores and the salon business. Home merchandise, including appliances, has also been another key focus area for the company. In July 2017, JCPenney announced the launch of toy shops in all of its stores and the availability of an extensive toy assortment on JCPenney.com.
JCPenney blamed the unfavorable weather in April for its lower fiscal first-quarter sales. JCPenney stock has fallen 12.7% on a YTD (year-to-date) basis as of June 7. Macy’s (M), Kohl’s (KSS), and Nordstrom’s (JWN) stock prices have risen 59.6%, 43.5%, and 10.2%, respectively, since the beginning of the year. JCPenney stock lags its department store peers and the S&P 500 Index (SPY), which has risen 3.6% on a YTD basis as of June 7.