Penney Takes Fast Fashion a Step Forward With Mango
Liz Sweney, executive vice president and general merchandise
manager of women’s apparel at JCPenney, says the company’s deal to establish
a store-within-the-store concept for Mango, the fast fashion retailer, is
nothing short of a game-changer for the department store chain.
“This is
a unique arrangement that is again allowing us to step up our style by offering
affordable contemporary fashion,” Ms. Sweney
told Dow Jones Newswires.
Penney will sell an exclusive line, MNG
by Mango, targeted to women between 18 and 35 beginning next fall in 75 stores
and on jcp.com. The company plans to have the 1,000 square-foot mini-stores
operating in 600 stores a year later.
"Fast fashion for the young, modern woman is our highest-potential business opportunity. We have long been intrigued with fast fashion, and through the recent launches of our own private brands, ‘she said’ and City Streets, we’ve experienced great success and confidence in expanding this offering to our customers,” said Myron (Mike) Ullman, III, chairman and chief executive officer of J.C. Penney, in a press release.
"Every
time we bring Mango to a new international market, it has driven immediate,
strong demand, and we have only begun to capitalize on the great desire for
Mango in the U.S.," said Enric Casi, Mango’s CEO. "JCPenney is the perfect
match for us to take advantage of the opportunity we see for the MNG by Mango
brand in this market."
Discussion Question: What is your
reaction to the J.C. Penney/Mango deal? What do the parties have to
gain from working with one another? Are there any potential downsides?
I’m a skeptic about JCPenney’s latest “reinvention.” So far, American Living hasn’t moved the comp-sales needle although it was also accorded a “store-within-a-store” treatment. And JCP has been painfully slow rolling out its Sephora shop concept, considering its stated success so far. Now JCP intends to launch Mango shops on top of its aggressive push in 2010 to become the exclusive retailer of the Liz Claiborne brand.
Meanwhile, JCP’s women’s apparel area looks unfocused and cluttered with too much “exclusive brand” proliferation to begin with. Clearly the results so far in 2010 (at least as far as top-line sales are concerned) show that Penney is mixing its “style/quality/price” messages and losing share in the meantime.
JCP is obviously stepping it up by bringing in popular and fashion-forward brands. The partnerships with Mango and the Olsen’s take exclusivity up another notch, targeting the teen and twenty-something end of the business. With H&M, Topshop, and Fast Retailing eyeing the US market, our home-grown retailers will need to be trendy, exclusive, and value driven to compete.
I do worry that these great opportunities will be squandered if they’re lost in the sea of other product on the floor. Just having great product isn’t enough; it must be marketed and serviced to take hold and become a sought after brand.
J.C. Penney continues to crow-bar a mind-boggling number of apparel brands big and small into its stores. Just when it looked like Ralph Lauren-created American Living was going to be the anchor, along came a flood of niche brands; then the big Liz announcement.
As skeptical as I am about all of this, I actually see the Mango partnership as a winner, one that will provide a great balance to Sephora and a shop-in-shop fast fashion outpost for Penney’s. I’ve been a big fan of Mango stores since I “discovered” them in Spain many years ago and was thrilled when they hit our shores. However, with H&M, Zara, Uniqlo and others flooding the market with fast fashion and fast basics, the Penney move will help Mango stand out and differentiate while allowing Penney’s to speak to an entirely new customer.
Great move, Penney’s–now cool it, k?
Focus is more critical than fast fashion. JCP has to decide what its brand stands for in the market before it continues many more tweaks.
Is this an admission by Penney’s that they are incapable of delivering “fast fashion” on their own? Will they destroy the Mango brand in the same way that the relationship with Sears has destroyed the once proud and valued Lands’ End brand name?
Penney has done pretty well opening up space in its stores to another retailer, Sephora, and that appears to have worked out pretty well. This should too, unless Mango decides it wants to go on a major expansion in the U.S. in a few years (I think it only has about a dozen stores now) and leave Penney behind. Will be interesting to see if H&M or any of the other fast fashion retailers start making similar deals with other U.S. chains….
JCPenney gains, as Mango brings a slightly younger customer base, with a fashion sense about it. Mango gains as they vastly expand their distribution channel.
The strategy is sound. Now it falls to execution–bringing the message to a customer base (newer), and keeping the “store-within-a-store” with its own uniqueness to the surrounding JCPenney.
Unfortunately, many who look at the success of fast fashion look only at the “fashion” part of it. But, the success of the fast fashion retailers rests on the operations part of the business. Without the “fast” there is no business.
Everyone hears the stories of how quickly fashions off the runway can end up in the stores. Some say Zara’s can do it in 15 days. But, no matter whether it is 15 days or 30 days, the critical part of the success is their inventory management. If they are turning their fashions every six weeks, they must be out of their current inventory before the new ones come in.
For JCP to be successful in fast fashion, they must do one of two things, neither of which is likely. Either, they must change their ordering, inventory, and merchandising practices from those of a typical department store or they must run the Mango departments completely separate from the balance of the store.
Successful fast fashion retailers turn their inventory anywhere from 10 to 15 times per year. JCP will be doing well with 4 turns per year.
I was in a new JC Penney in NY over the weekend, and I am not sold on the theory that people looking for fashion are going to think Penney’s first. While I don’t think the Mango exclusive arrangement will have any negative effect on the Penney’s brand, I do think it can hurt Mango.
This one is not a slam-dunk, and I fear that Mango is going to bear the brunt if this does prove to be a misstep.
I have 2 reactions to this story:
1) I had never heard the phrase “fast fashion”; but having now heard it I know almost immediately I don’t like it; and
2) Good or bad, it’s hard to believe this will have much of an impact on JCP’s overall picture: it’s what – 1% of the selling space in 10% of their stores? Perhaps a truly iconic brand could be leveraged into something meaningful, but I’m sorry, I don’t think “Mango” is that brand.
Of course I wish them both well.
JCP deserves credit for attempting to breathe life into a brand that was rapidly following Sears into oblivion. There are great comments above about the need to rationalize the apparel floor, ensure appropriate inventory management, and so on.
Once these mechanics are in place and functioning effectively (no small task), the next, and most important step is to develop a consistent and effective branding message to actually attract their target audience. This is, in my view, their biggest challenge. The JCP brand carries a lot of baggage, not much of which is consistent with their “new” look. Fortunately, there is so little excitement around apparel these days that they at least have a chance.
This is a brilliant move for JCP in the teen/young woman market. Mike Boyleston and the merchants at JCP have been VERY successful in altering the perception of the store in the younger age ranges. Already, for kids, JCP is no longer a “I’ve got to hide where Mom bought this” location. Altering the perception for teens is even harder, yet JCP has been doing this and continues to do so with concentrated focus.
The specialty microsites, facebook commitment, and other web 2.0 efforts have been successful in creating the opportunity for something like the Mango deal to actually work.
The part of the deal I like is that Mango is responsible for the design and sourcing and JCP will handle the logistics and inventory management. Other BrainTrust panelists have noted that fast fashion turns at a higher rate than JCP merchants are used to…and even alluded to a 4 turn as acceptable. Sorry, that simply isn’t the case at JCP and hasn’t been for several years now. Yes, there are aspects and categories of merchandise which turn slowly. However, the merchants in both the buying and planning area at JCP fully understand that fashion must be held to a higher standard…and more importantly, they understand how to accomplish that.
No, I’m not worried about JCP lacking the expertise, systems, or skills to implement fast fashion inventory management. Without insight into the deal itself, it’s hard to know if the one elephant in the living room exists here: minimum volume guarantees. The single greatest obstacle to effective merchandising and fashion inventory management on exclusive deals of this kind are commitments made to minimum volume, gross margin dollars or merchandise bought. The nature of the deal, with Mango handling sourcing, may mean that Mango will be selling the merchandise to JCP, in which case there may very well be minimum issues. These minimums have, in the past, saddled good merchants with a constraint which forced them to make bad decisions.
Let’s hope that the potential inherent in the deal (and it’s very good, by the way) isn’t limited by the details.
This is more of adopting an idea from someone else rather than a game-changing move. How does this change the game for consumers or for the store–other than reconfiguring the floor?
I agree with everyone else that execution is what is going to ultimately determine whether this move is ultimately a good one or bad one for JCP but on a whole, I like the move. Upping the percentage of clearly fashionable apparel into its product mix helps JCP dispel the impression that the company is out of touch with trends and styles. This could have a slight halo effect on sales of its other apparel lines, especially its private branded merchandise.