JC Penney trims high-profile brands in favor of its own labels

December 12
12:45 PM 2013

After experiencing a successive decline in sales for the last two years, JC Penney Co Inc has plans to dispose or trim some of its top name brands that was ushered in by former Chief Executive Officer Ron Johnson. According to a Reuters exclusive report, some of the brands could include some Martha Stewart-designed home furnishings, Joe Fresh clothes and its own jcp menswear.

In an interview, CEO Mike Ullman told Reuters, "What we now need is to edit things out that didn't resonate sufficiently."

According to JC Penny, it will be using its prim floor space freed up from its trimmings to showcase its exclusive private-label brands, which were said to be more profitable. The report said the retailer acquired its billion-dollar St. John's Bay apparel line as well as JCP Home and Cooks back, and will be reintroducing its Ambrielle lingerie next year in February.

The changes, said Reuters, are Ullman's latest efforts to rebuild the retailer, of which its sales took a 25% nosedive after Johnson eliminated popular coupons and brands to make the stores more upscale. When Ullman stepped in in April, he brought back St. John's Bay and reinstated the discounts immediately to gain its avid customers back.

"The customer never gave up on the goods. We gave up on the customer, and we paid a price for it," Ullman said.

This will not be Ullman's first time to lead JC Penney. During his first term between 2004 and 2011, his strategies had made JC Penney posted sales and gross profit margins at all-time records. Ullman was said to be the brains behind the "shop-within-a shop" concept of the wildly successful Sephora cosmetics. However, Reuters said JC Penney's cost structure and sales per square feet caused the company to become stagnant, which led to Ullman's departure after activist investor William Ackman orchestrated his removal in 2011.

Ullman told Reuters that the priority is to increase sales to its previous levels. He added, "We don't have six or seven years to get our business back. Half of our business has to be brands that we can produce profitably."

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