A Shiny Penney Opens Amidst the Tarnish

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Imagine a JC Penney store where the layout is modern and cool, where there are extras like hair salons, shoe repair, video games, copious seating throughout the store; where the merchandise is smart but right for the customer base and where you might even run into the ghost of Ron Johnson.

You can imagine such a store or you can go see it in person halfway between Dallas and Fort Worth at the North East Mall in the town of Hurst, TX. This past November, Penney reopened the store as a test lab for the kinds of merchandising initiatives it could bring to some of its 850 or so stores. Of course, the retailing clock is ticking for Penney, which is struggling through declining sales, sketchy financials and a looming deadline from creditors deeply worried about its long-term prospects. It doesn\’t help that the retailer competes in the ever-shrinking middle market, neither low-price fish nor luxury fowl in an increasingly bipolar marketplace.

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JCP Reboot

The Penney store in Hurst touts in both its signage and regular in-store announcements that it is \”Brand new…and just for you,\” and indeed it measures up to both. At its opening, CEO Jill Soltou, who has come under criticism for not moving fast enough to turn around the retailer, emphasized this was not a prototype that would be rolled out chain wise, but was instead \”an investment in our future.\” Speaking to the Dallas Morning News, she said the store \”is the fullest articulation of our brand strategy and we\’re going to use it as a lab.\”

Interestingly enough the store is located in what is largely a middle-income working-class area, based on my cursory observation of shoppers, rather than in a more upscale North Dallas neighborhood where prior managements tended to roll out test concepts. Credit Soltou for understanding the task at hand: \”Our reality is that we are in malls and we can\’t just be a regular department store.\” Soltau said.

Fresh Start

So what makes this Penney different from all other iterations of the retailer?

  • It starts with the signage, which features a vintage retro Penney logo in script, accented by the short-lived JCP red box of the Johnson era. While employees have maddingly referred to it as \”The Penney Company,\” shoppers have always known it as just Penney\’s.
  • Inside, the two-story space (it was previously three levels but the basement has been cleverly sealed off) is open and airy in a way no other retailers in this mid-market space are able to do. A newspaper report says the amount of merchandise on the selling floor has been reduced by 13 percent and one feels it immediately in less cluttered displays and fixtures. A wide aisle on the second floor is almost spacious enough to drive a semi through.
  • The layout features a number of selling areas defined by curved walls that create dedicated departments without fostering a rigid, claustrophobic environment. There are reported to be some 350 full and partial-body mannequins, arranged with a beefed-up in-store visual merchandising staff. The Sephora shop is prominent and generously sized.
  • Services are a big part of the store. There are separate men\’s and women\’s hair salon/barber departments, a shoe repair/shine kiosk, two coffee bars from local barista Pearl Cup and generous seating areas throughout the store for tired shoppers, bored companions and children of all ages.
  • Merchandising and display bells and whistles turn up around nearly every corner, including vintage videogames in the young men\’s area, charging stations, logically designed dressing rooms that aren\’t an afterthought, a Pinterest station in the home area, giant graphics and images and clever displays that recall the good old days of retailing in their attention to detail and quality.
  • And curiously enough Soltau said the store does it all with regular-run Penney merchandise, not special one-offs brought in to impress the neighbors – and the investment community.

\"\"Deja Vu

If some of these tactics remind you of the ill-fated Ron Johnson makeover of Penney now nearly ten years ago, that\’s not entirely unexpected. He preached some of these same techniques and in-store display concepts in his radical reordering of the Penney landscape, but here\’s the big difference: this new Penney store directs all of its attention at its current customer base and attainable consumer targets rather than the giant leap that Johnson tried to reach for. This Hurst store, in its location, merchandise and tone operates very much in the here-and-now rather than in some retail never-neverland.

Too Little, Too Late?

All of that said, anyone who has followed retail for any period of time knows that most companies can roll out a pretty spiffy single concept store and still fail miserably because they have neither the time nor resources to take these initiatives chain-wide. While this store remodel was no doubt less costly than the exorbitantly expensive gut-jobs Johnson oversaw, it still cost money…money that cash-starved Penney doesn\’t have.

And no doubt, some of what is being tested in Texas will eventually not fly. Those wide-open selling spaces and reduced merchandise-on-hand could play havoc with sales per square foot productivity. One has to think shoe shines will not work in a world of Nikes and All Birds. And what will the store look like when it\’s blow-out Tuesday and the sale racks are toted out to move the merch?

[callout]The retailing clock is ticking for Penney, which is struggling through declining sales, sketchy financials and a looming deadline from creditors deeply worried about its long-term prospects.[/callout]

But you have to like this new Penney store for what it represents. It shows a pretty carefully thought-out game plan for the world Penney plays in and will need to conquer if it has any chance of ever succeeding. Lots of people have already counted out Penney and forecast a tragic end for what has over the years been one of the most beloved retailers in the country. That may be what eventually happens but the Hurst, TX store offers a glimmering hope that the end may not be so near. Lots of people – from employees to investors and from suppliers to shoppers – would welcome that. But which way the coin flips is still to be determined.

Warren Shoulberg liked the new Penney store so much he actually bought something that day. It was on sale, but still, he made a purchase.

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