With the return of Ken Mangone, J.C. Penney appears to be reviving its private brand business. Former CEO Ron Johnson cut the scope of JCP’s private brands, including nationally known labels like Worthington and St. John’s Bay. Mangone left JCP under unclear circumstances, as Johnson downsized those labels and combined them.
Now, four months later, former CEO Mike Ullman is back and so is Mangone. He has not explained why he left JCP, but he returned without hesitation. His 35-year career at the company has spanned many different areas. He now feels that the firm has the tools to be successful with their private labels.
The company is supporting the effort by opening a 40,000 square foot design center on Lafayette Street in Manhattan. The center is in a landmark building, with all the amenities young creatives have come to expect, including exposed brick walls and lots of light. JCP is betting that its private labels can again give the company a competitive edge, and can help redefine its image after the confusion brought about by Johnson’s efforts.
The firm’s Form 10-K indicates that private brands and exclusive brands represented around 53% of JCP’s merchandise in 2012, down 2 percentage points from 2011. Johnson was moving to bring the figure down further. At their peak, two of the private brands had more than $1 billion in revenue. Currently, Arizona is still in that range.
One surprising move was Johnson’s elimination of St. John’s Bay women’s selection. Customers were fond of it, and many people protested when it was gone. The firm brought it back in early March and is also reviving the men’s line, which was shrunk.
Several of the firm’s private brands are actually nationally known, according to Mangone. That includes Worthington, Arizona, Stafford, and jcp home, along with Liz Claiborne, which the company acquired in 2011.
The company is already betting big on back-to-school, with plans for major private brand promotions. Despite some shrinkage under Johnson, JCP still has the sourcing infrastructure in place to support the push, and it also has loyal manufacturers.
Like many firms, JCP has been working to reduce the time it takes to get a concept into the stores. Mangone predicts that those supplier relationships ad the new talent at the design center will move the firm toward that goal. Times are already down from an average of 50 weeks several years ago to 35 weeks today.
Adding a Manhattan design center is a pragmatic move that aims to increase the talent pool of designers by attracting people who may prefer to live in New York over Plano, Texas.
While most of JCP’s design team will stay in Texas and Mangone himself will be based there, the firm will have designers, technical designers, CAD operators, trend teams, fabric teams, color and print quality teams, and a print and fabric archive, as well as a showroom for Penney’s merchants who come up to shop the private brands.
Mangone says that his focus is to get the core JCP brands back to their previous level, and continue drawing inspiration from macro-consumer trends and fashion trends. Each brand has a trend filter that guides the attitude and look, to keep consistent brand DNA. Mangone does not predict adding any new brands, immediately.