Penney Emphasizes Private Labels

Discussion
Jan 17, 2006
George Anderson

By George Anderson

J.C.Penney is looking to new private label brands in the apparel and furniture categories to help it connect with its core middle-class consumer base.

The two newest labels the chain plans to introduce include a casual wear line of men’s clothing under the Solitude brand and a modern furniture collection under the Studio name.

The Solitude line will include items retailing between $38 and $50. It was developed by surfer Shaun Tompon and his fashion designer wife, Carla.

“Solitude will be a great addition to our selection of proprietary brands as it fills a need for men who are looking to infuse casual yet sophisticated pieces into their wardrobe,” said Lana Cain, executive vice president and general merchandise manager for men’s apparel at J.C.Penney. “The colors, textures and prints all reflect a carefree spirit and a man who knows how to enjoy life during his free time.”

Daphne Avila, a spokesperson for J.C.Penney, told Bloomberg News that the retailer is looking to connect with more male shoppers.

“We’re certainly looking to expand our menswear offerings,” she said.

Penney recently introduced $600 Italian-label suits under its Stafford private label and it intends to target younger male shoppers with a line of Italian-made suits under its
J. Ferrar line.

Moderator’s Comment: What is your assessment of J.C.Penney’s private label strategy? What distinguishes retailers with strong private label programs
and those that don’t?

George Anderson – Moderator

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7 Comments on "Penney Emphasizes Private Labels"


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Mark Lilien
Guest
15 years 1 month ago

Without its private label profits, there would be no J.C.Penney. Its strengths in consistent design, value, and planning have been exhibited for at least 3 decades. Penney’s can strategize and implement a multiyear merchandising investment. Very few other retailers have the vision, skills, and perseverance for this. Great private label programs require long-term commitment to a great vision. If you’re in it for a short term margin boost, with no superior design and sourcing skills, failure in the long term is certain.

Warren Thayer
Guest
15 years 1 month ago

The plan sounds reasonable. The retailers who do the best job with private label understand their shoppers. They let their shoppers decide what the level of private label penetration will be, rather than force a set level of penetration they want to achieve. They have a mission statement and a plan for private label (and each tier/label), and they set aside appropriate resources to work the plan. They use private label as a differentiator, rather than a lower-price national brand equivalent (although the latter is important, too.) They monitor categories holistically, with an eye to private label’s effect on overall sales and profitability, and consumer perceptions of the offering. All three of those are key. They partner with suppliers rather than beat them to death, literally, on price. All that’s a good start.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
15 years 1 month ago

Strong private label programs don’t always lead to successful overall sales. One only has to look at Kmart’s powerful Martha Stewart and Roger Penske private labels for examples of this. The trick is not to count on PL as your main attraction. There are exceptions, of course, such as Craftsman at Sears and various PLs at Trader Joe’s. But retailers who expertly integrate strong, balanced PL into a national brand/value mix — as JCP does — maximize the benefits from their PL R&D investments.

Anna Murray
Guest
Anna Murray
15 years 1 month ago

I like what Target has done with Isaac Mizrahi, and I think it’s a better strategy than private label. The clothes are hip and fun and are really maintain the Mizrahi style. I used to buy nothing at Target clothing-wise than jeans and T-shirts. But I have several of the Mizrahi outfits.

They key, it seems to me, it to get middle class consumers to believe that they are getting real style at a value price. Therefore, the brand can’t be watered down by the retailer. I think Martha Stewart’s brand suffered in association with Kmart. Then, there’s the horrible strategy of getting some washed up actress to sponsor a clothing line. Consumer’s need to believe that the retailer is serious about the brand.

Art Williams
Guest
Art Williams
15 years 1 month ago

I think Penney’s does a very good job with their private label and these new labels will strengthen it. I agree with the comments about private label needing to have a long term commitment from the retailer to be truly successful. This too is an area in which Penney’s does well; having a strategy and staying with it for the long term. It is great to see a retailer with a long-term plan that is something more than reduce expenses and increase sales.

Don Delzell
Guest
Don Delzell
15 years 1 month ago
I am usually uncomfortable with aligning a retailer private label with a specific designer, particularly if that designer is narrowly focused in interpretation. I am unfamiliar with the individuals driving the new casual menswear label for JCP, so I cannot judge the flexibility and adaptive potential inherent. Designers tend to become focused in a particular lifestyle expression niche. A broad based retailer, such as JCP, needs to have the ability to shift the expression of fashion as the trends and lifestyles shift in the general population. Examples abound of seemingly evergreen lifestyle designers who have not, actually, passed the test of time. By having the private label represent a narrow lifestyle designation, the limitations imposed on the buyers are also not optimal. What if the marketplace generates a better designer, more in touch with that lifestyle niche, who becomes a “must have” in the assortment? What then becomes of the private label presentation? Must it then compete on price? Cannibalization inevitably occurs, or, worse, the buyer is constrained from pursuing the business with the branded… Read more »
Kai Clarke
Guest
15 years 1 month ago

Private labels are critical to any modern retailer’s success. Wal-Mart and Costco have done a great job with these, and Penny’s recognizes that the more they can expand on their private label offerings, the better their profits and revenues will become. The key is balancing their private label offerings with a strong selection of name brand labels so that the consumer has an instant comparison of offerings from which to choose and to see the value of the private label. So long as Penny’s does this, and prices their PL below that of the comparable name brands, they will be successful.

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