J.C. Penney Stands Alone
J.C. Penney continues to roll out off-mall standalone stores and the latest area to get one of these single-level units is a suburb outside of Chicago.
According to a report in the Chicago Tribune, Penney plans to open a 104,000 square-foot store in Woodridge, Ill. The building previously housed a Kmart.
The new store is a continuation of Penney’s plan to seek growth outside of malls. It is not alone in the department store sector, as others such as Sears seek to capture business lost to competitors, including Target and Kohl’s, that operate, for the most part, standalone stores.
Steven Platt, director of Platt Retail Institute, said J.C. Penney is on the track. “I wouldn’t continue to put my assets in mall-based stores, either,” he said. “Mall traffic is down. Freestanding stores are a lot more convenient.”
Penney has found clear benefits to operating standalone units. Company stores outside of malls average $200 in sales per square foot while mall based locations generate $157. Penney’s management believes it can build sales in standalone stores to $250 a square foot.
Currently, the chain has 22 standalone stores and it plans to add the same number to its portfolio by the end of the year. It is looking to add at least 50 standalone units annually beginning next year. In total, J.C. Penney operates 1,020 stores in addition to its catalog and online businesses.
Discussion Question: Traditional mall-based stores
are looking to standalone locations while others, such as Target, are beginning
to open stores in malls. How do you make heads or tails from this?