J.C. Penney's New Focus On Store Brands, Exclusives and Martha Stewart

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January 31, 2012

J.C. Penney is shaking things up with new brands, new partnerships and new pricing as new CEO Ron Johnson outlines the retailer’s plans for transformation with a focus on exclusives partnerships and brands.

The part of the plan garnering the most publicity is a move away from promotional pricing to what Johnson called “fair and square” pricing: one consistent low price and separate monthly promotions. But the new J.C. Penney is just as focused on brand building.

The retailer is being renamed jcpenney and a new logo includes imagery reminiscent of the American flag. “We are going to rethink every aspect of our business, boldly pursue change, and create long-term shareholder value, as we become America's favorite store,” said Johnson, at an event in New York outlining the changes. “We will transform each and every jcpenney store over the next four years with a month-by-month, shop-by-shop roll-out of exciting new merchandise initiatives."

New Brands
The re-invention of the jcpenney store experience entails the re-merchandising of the entire store with 80 to 100 brand shops, dubbed Main Street, and center store Town Square.

New brands that will be featured in jcpenney's brand shops Martha Stewart and l'amour nanette lepore, a new exclusive apparel line from designer Nanette Lepore target at teens. jcpenney also announced plans to transform its existing brands, including IZOD, Liz Claiborne and The Original Arizona Jean Company. jcpenney expects to feature 30 new and transformed brands by fall 2012.

The changes begin on February 1, as jcpenney implementing the new price policy and logo. Beginning in August of this year, jcpenney will begin a month-by-month, shop-by-shop strategy to update all stores with new and exciting merchandise and presentation. Two to three shops will be installed monthly, each and every month, over a four-year period, including the debut of Town Square during 2013. These initiatives will culminate in the complete transformation of jcpenney by the end of 2015.

Martha Stewart partnership at risk
As part of its brand differentiation, jcpenney entered into a strategic alliance with Martha Stewart and planned to open Martha Stewart stores within jcpenney outlets beginning in February 2013. jcpenney said it would market and source the products while Stewart would assist in staffing the departments. Under the terms of this 10-year commercial agreement, the two companies are to jointly develop an e-commerce site, expected to launch in 2013.

But the agreement may have run afoul with Stewart’s existing partnership agreement with Macy’s department stores. The retailer filed a complaint in New York State Supreme Court to stop Martha Stewart Living from proceeding with the sales agreement. The complaint is sealed and details unavailable, but Macy’s claims it has an agreement to sell Martha Stewart branded products for another five years, well beyond JcPenney’s 2013 launch date.

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