Where does J.C. Penney go after ending its Bombfell subscription deal?

Discussion
Source: JCPenney, Bombfell
Feb 28, 2019
George Anderson

Last month, J.C. Penney announced that it was getting out of the appliance sales business to focus attention on apparel and other soft goods categories. Just what that will mean remains to be seen as CEO Jill Soltau, hired in October, puts her personal stamp on the company. One thing Penney’s plans will not include is continuing participation in the Bombfell men’s clothing subscription service.

The Bombfell service is similar to those offered by StitchFix and Nordstrom’s Trunk Club. Customers pay a monthly subscription fee, $20, to have a dedicated stylist pick out items for them to wear. Items are shipped free with no cost for returns. Any items kept have the monthly fee deducted from their cost.

In an email to the chubstr blog, Bombfell said it would end shipments of Penney merchandise today and issue refunds for all returned merchandise by April 15.

Penney’s relationship with Bombfell was short-lived, having only been announced in December 2017. The service offered Penney’s private labels as well as national brands in big and tall sizes sold by the chain. Bombfell handled logistics as part of the deal.

Men’s big and tall clothing has been an area of growing strength for Penney. On the company’s third quarter earnings call in November, Trent Kruse, J.C. Penney’s head of investor relations, said, “Our focus on special sizes continues to show results with our men’s big and tall business up nearly 15 percent this quarter. This customer knows they can count on J.C. Penney to provide the fit they need and the style they deserve.”

Burt Flickinger, managing director of Strategic Resource Group, told Reuters that, while big and tall clothing is among the fastest growing categories at retail, “neither Penney nor Bombfell really has the size or the scale now to take the partnership forward.”

Penney announced this morning that its same-store sales for the fourth quarter fell four percent with Ms. Soltau expressing optimism about the chain’s future.

“Based on everything I have seen and heard, I am even more convinced that J.C. Penney is a revered brand that has the capacity to deliver improved results,” she said. “In spite of our past financial performance, we have already taken meaningful steps to drive improvement in key businesses such as women’s apparel, active apparel, special sized apparel and fine jewelry.”

DISCUSSION QUESTIONS: Do you expect J.C. Penney to abandon subscription services altogether after Bombfell or will it seek an alternative? In general, do you think subscription services are a business opportunity that department stores should pursue?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Developing new businesses and new channels is inherently challenging. However, if you succeed, it can lead to growth and prosperity."
"The demographic of people who shop at J.C. Penney aren’t the same demographic signing up for subscription boxes, so it doesn’t surprise me that the effort was short-lived."
"It takes determined leadership to turn off these “nice to haves” and focus on getting the core business right once and for all."

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18 Comments on "Where does J.C. Penney go after ending its Bombfell subscription deal?"


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Dick Seesel
BrainTrust

Jill Soltau and team need to focus on J.C. Penney’s core businesses and profitable locations — along with catching up with competitors’ omnichannel strategies. Axing major appliances was a key first step, and it sounds like Bombfell was another distraction. I’m guessing that the customer for subscription services is not a good match for J.C. Penney anyway.

Jeff Sward
BrainTrust

I’m guessing this is a move to regroup and try again. In an environment where we know subscriptions work, J.C. Penney’s obviously wasn’t working. So good for them hitting the pause button. Learn and adapt. Evolve. I’m going to interpret this as a mature, reasoned decision. A couple more of those will serve them well.

Neil Saunders
BrainTrust

J.C. Penney has a lot of issues to solve and it doesn’t need distractions. Given the scale of this venture and the fact J.C. Penney is hardly a destination for fashion, this was an initiative the company didn’t need. Jill Soltau was right to ditch it. That said, clothing rental is growing rapidly even if it’s not the right model for J.C. Penney.

gordon arnold
Guest

Being sold on the capabilities of products and services that do not meet the needs of the company and consumers is a disaster every time. To be successful J.C. Penney must get executives on board that can identify these needs to become relevant in e-commerce. It is almost certain they will continue in some way or by some means but without the necessary talent driving there is little hope for success.

Phil Masiello
BrainTrust

The past three CEOs of J.C. Penney have all had the same talking points about the revered brand and past performance. Yet none have articulated a clear strategy. What we see are reactions and not proactive steps. I don’t know if the Bombfell strategy was a good one or a bad one. There are no numbers to look at. But I do think, with certain retailers, subscription services could be a great way to cement brand loyalty, provide a service and grow a new revenue channel.

It appears that J.C. Penney is getting out of every business segment that is challenging. Only to focus on their dead stores. Developing new businesses and new channels is inherently challenging. However, if you succeed, it can lead to growth and prosperity.

Ray Riley
BrainTrust

Love this. J.C. Penney’s former slapdash approach to driving revenue and market share was disgraceful. It takes determined leadership to turn off these “nice to haves” and focus on getting the core business right once and for all. That does not happen overnight, and hopefully there is board and investor patience to see what’s required.

Tom Dougherty
BrainTrust

J.C. Penney’s problems are deeper than this failed subscription plan. They MUST reinvent department store retail and find ways to make the brand a destination.

The issue is a strategic one. Not a tactical one. If this signals a move to address a strategy problem, I welcome it. However, I’m pretty sure they have no idea where to go or how to go there.

Brandon Rael
BrainTrust

The business challenges for J.C. Penney are far more significant than their decision to abandon subscription services. Their core customers are not a good target for subscription services.

Fundamentally, it’s difficult for any consumer to understand what J.C. Penney stands for as a department store, what is their purpose, and how are they differentiated against Target, Macy’s and other stores. Jill Soltau and the J.C. Penney leadership team have a clear opportunity to rebrand what the company is, what is their value proposition, and seek ways to reinvent the in-store shopping experience.

Rob Gallo
BrainTrust

J.C. Penney continues to scramble for relevancy. Maybe they are in better shape than Sears, but once Sears goes away the focus will turn to J.C. Penney. The brand could be salvageable, but other subscription services or Big & Tall are not going to save it.

Georganne Bender
BrainTrust

This is bad news for Bombfell’s subscription customers, but it’s a good move for J.C. Penney. Jill Soltau is a smart woman who is making thoughtful decisions. I’m looking forward to seeing what she does next.

Do I think subscription services are a business opportunity that department stores should pursue? Anecdotally, I’d have to say yes. Several of my friends are in love with Stitch Fix. And another, a high level fashion industry event planner, relies on Rent the Runway — she doesn’t pack much anymore. Her work outfits are waiting for her at the hotel when she arrives. That sounds like heaven to me.

Jasmine Glasheen
BrainTrust

The demographic of people who shop at J.C. Penney aren’t the same demographic signing up for subscription boxes, so it doesn’t surprise me that the effort was short-lived. As Georganne and I discussed on Braintrust Live, J.C. Penney is categorically bipolar and needs to commit to a demographic and follow through if it’s going to have any staying power.

Gene Detroyer
BrainTrust

J.C. Penney, over and out!

Bob Phibbs
BrainTrust

With their announcement about 4 percent drop in sales last quarter, J.C. Penney has far bigger issues to worry about than this.

Kenneth Leung
BrainTrust

Given the challenges J.C. Penney faces, the key is to focus on fixing its core of stores and online business and merchandising now. If big and tall is a category that works, expand that in the store and online merchandising, THEN put it in a subscription service that it can support. The key to winning in retail these days is is to try fast and fail fast and move on.

Craig Sundstrom
Guest

Bombfell? I won’t comment further on the symbolism of that name (and fact that the “relationship” didn’t work out.) Despite George’s assertion that this was “similar” to Nordstrom’s Trunk Club, I think the similarity was like that between a Porsche and a Yugo … in name only. Nordstrom has as one of its (main) competitive strengths a talented staff that specializes in services just like this; JCP does not, which made the whole idea seem rather silly. I suspect any store for whom this idea would work already has one in place.

Steve Dennis
BrainTrust

Bombfell was never going to be a bombshell. Subscription services might be a nice add-on done right, but without a healthy core apparel business, it’s just lipstick on the pig. Here’s my new Forbes post on some of the things Penney’s (and Macy’s) need to focus on now.

NAVJIT BHASIN
Guest
5 months 19 days ago

J.C. Penney could do a lot worse choosing a business model to pursue than the subscription model. Developing a business where selling expenses fall away and revenue flow becomes more predictable can only benefit their struggling brand. But choosing what opportunity and what merchandise is key.

In retrospect, a subscription service that caters to big and tall men may seem like a winner, but is that what the J.C. Penney brand means? And what makes Penney’s menswear special? The key to subscription services is client acquisition and retention – Penney’s no doubt had a steep climb to educate and convert prospects to sign up and build a file.

It is ironic that at one time, Penney was a premier cataloger and had mastered this skill. If they look back, they’ll see the key to this lucrative business model is differentiation – offering something only they have, that clients need regularly.

Rob Gallo
BrainTrust

It’s a similar discussion to the Sears/J.C. Penney threads from February.
Much of what has been said for Sears can be said for J.C. Penney. Like Sears, JCP has a customer relevance problem. Consumers have moved on. The brand is dead except for the reminiscing. Efforts by a leader to salvage the brand are low risk. Everybody expects it to be a losing proposition, so your career isn’t really going to be impacted negatively. If you can magically get a bump in performance, other companies will come calling.

wpDiscuz
Braintrust
"Developing new businesses and new channels is inherently challenging. However, if you succeed, it can lead to growth and prosperity."
"The demographic of people who shop at J.C. Penney aren’t the same demographic signing up for subscription boxes, so it doesn’t surprise me that the effort was short-lived."
"It takes determined leadership to turn off these “nice to haves” and focus on getting the core business right once and for all."

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