JCPenney CEO talks turnaround, looks to data to boost revenue

JCPenney (NYSE:JCP) has focused its turnaround efforts on new merchandising initiatives, store brands and marketing programs. Now, attention turns to technology as the retailer seeks to modernize its operations with big data.

Under former CEO Ron Johnson, JCPenney not only failed to attract new customers, it lost many existing ones and revenues dropped by roughly $6 billion in a single year. Johnson's predecessor Myron Ullman returned in 2013 and set about reinstating some discontinued programs to stop the bleeding.

Marvin Ellison was named president and CEO on Aug. 1 and recently outlined his plan to bring in $1.2 billion in the next two years. It's a three-pronged plan that includes building omnichannel capabilities, growing merchandising initiatives rooted in strong store brands, and increasing revenue per customer.

"We're deeply passionate about an omnichannel experience that serves customers any way that they want to be served," Ellison said during a retailing summit held by Texas A&M University in Dallas. "We want to monetize every engagement with the customer so when he or she comes in, we offer them something that gives them the ability to solve a problem, fill a need, and gets them excited about coming back."

JCPenney counts among its best assets the branded partnerships operating within the company's stores, including the Sephora and Disney shops; 800 in-store hair salons that are being rebranded as InStyle salons; Modern Bride fine jewelry; and the Levi Strauss assortment, according to the Dallas Business Journal.

JCPenney has a growing private label portfolio with new brands such as a menswear line by former NFL football player Michael Strahan, the Belle + Sky fast fashion label, and children's clothing featuring Disney characters by Okie Dokie. The retailer also continues to grow its classic store brands including St. John's Bay and Liz Claiborne, labels famously discontinued during Johnson's tenure.

The buildout of exclusive merchandise can only go so far and JCPenney is turning to technology, including data analytics, to improve assortment and modernize the supply chain. The retailer recently added two executives to lead these key departments.

It's all about keeping it simple, said Ellison: "Clarity of purpose and simplicity tend to drive higher productivity and easier execution."

For more:
-See this Dallas Business Journal article
-See this Women's Wear Daily story (subscription)

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