JCPenney CEO talks brand turnaround, focus on apparel, and the holiday season
JCPenney CEO Marc Rosen joins Yahoo Finance Live to discuss a post-bankruptcy brand, the company’s 2023 business strategy, bringing families value during the holiday season, investing in the in-person and online customer experience, and the outlook for profit growth.
Video Transcript
[AUDIO LOGO]
- The holiday shopping season is here, but cost-conscious consumers present a challenge for retailers as inflation remains a pressing issue. For more on the retail space, we have JCPenney CEO Marc Rosen in the Yahoo Finance house. Marc, good to finally meet you here.
Before we even get into the holiday season, take us through, what does JCPenney look like today? How many stores do you have in operation post bankruptcy? And have you been making money this year?
MARC ROSEN: Yes, so we emerged from bankruptcy, first of all, with a very clean balance sheet, low debt, and strong liquidity. We have just over 660 stores around the US serving customers. And there are over 50 million customers who have visited our stores in the last three years.
So we have strong customer base, strong store presence. And then we also have a very strong online presence with our JCP.com. So we are there to serve America's diverse working families wherever they want to shop and to bring them the value that they're looking for during this holiday season.
- Marc, talk to us about your playbook on turning the company around. So I went to my JCPenney over the weekend head of this segment. There's no more appliances, a much smaller presence in home goods, a lot more apparel it seems like on the first floor. It's a two-level store. But talk to us about what you've been doing.
MARC ROSEN: Yes, so thank you for bringing up the apparel and the brand. So there have been a lot of efforts to bring new brands into our store. We've introduced some private-label brands, like Mutual Weave. We've introduced some brands with our partner and our owner, Authentic Brands, like Sports Illustrated and like Frye and Co. And so we're really focused on bringing the product and the brands to the consumer that are going to show them that they could get great product with great quality at a great price and find the value they're looking for. That's across the apparel department.
We're also investing heavily in making sure that we can be there for them where they want to shop and investing in the online experience, really revamping our website. We've rolled out a whole new homepage. And we're also rolling out new email programs and new ways to really personalize the experience for the customer and make sure that we have the relevant shopping experience now for consumers.
- Marc, it's Julie here. I have to apologize. Earlier in the show, I was saying that I once worked in a place where they had a reporter go into a store and there was someone working out on the workout equipment. That was Sears, not JCPenney. Different retailer.
But I do want to ask you whether what you're doing has been bearing fruit. Have you seen an uptick in store traffic? Have you seen an uptick in sales? And what are you looking at for this holiday season?
MARC ROSEN: Yes, we are really encouraged. What we're focused on right now is bringing those 50 million customers that have visited our stores back more frequently and really showing them the breadth of product that they can get in our stores. And that ranges from bringing in our JCPenney beauty to everything that we've done across the apparel brands to what we're doing in the salon and showing them that full experience that they can get in the store. And there are also great areas, like home, where we're showing the customer the great sheets, towels, and appliances-- not appliances, but the small electric that they can get for their stores, for home.
And so we have brought in that new assortment. And for customers, what we're seeing now is we're really encouraged that in the last several months, we've seen an upturn in that frequency. And so customers are realizing what they can get. And they're coming back more frequently. And that is really how we're looking at the turnaround right now.
- Marc, there's been a clear shift to digital within that turnaround as well. There's no more JCPenney catalog that I can thumb through for the holidays or anything like that that is really nostalgic for many shoppers, perhaps, out there. But in that shift to digital, how do you in the future maintain or envision that you'll create more of that touchpoint with consumers? And which categories have you seen them lean into the most in that shift to digital?
MARC ROSEN: As we've shifted to digital, I think one of the things that we've seen is that we're focused on our apparel brands. And if you look at the homepage, one of the things that we're doing now is trying to show the customer more of our perspective on outfitting and what they can do with our brands and how we show them style. For our customers, we're really about a place where America's diverse working families can come and not have to make the trade-offs that they make in their daily life, where they can get both style, value, and experience all together.
And so what we're really focused on in the apparel sector is showing them on the homepage what's trending now, new merchandise, new brands, and how they can put that together and outfit that at a great price with great, quality product.
- Mark, are you OK with, let's say, a 25-year-old crowd not coming into the JCPenney as long as, let's say, my mom, who is an avid JCPenney shopper, as long as she comes in more frequently? Are you OK just not serving everyone?
MARC ROSEN: We actually are, if we look at the base of our customers right now, we have both customers like your mom, but we also see younger customers coming to our brand. We just introduced the Forever 21 brand. And that has been one of our most successful product launches for young women.
And we're looking similarly at young men's product. Our Arizona brand is really, really strong with young consumers. And so we absolutely do have young consumers in our store. And we believe that we have for them, whether they want to shop in store or online, the product that they're going to need as they look for the things that are going to bring them the experiences that they want.
- Mark, what does the five-year roadmap look like for JCPenney inside of-- as it pertains to Simon Property and your owners? Do you envision a scenario where you do come back to public markets?
MARC ROSEN: Yeah, we right now are focused on really creating value in the business and bringing the business back and bringing customers back into the store. And that's really focused on showing them the value experience. It's focused on rolling out our brands. It's focused on deepening that relationship with our customers and driving frequency and building the online experience.
As we do that, our ownership group-- and I feel really, really that we're fortunate with this-- is we're aligned with the ownership group that the priority is to bring that customer back and to build a strong customer base. And as we focus on that, we will see over time what unfolds and how we emerge.
- The reality of the environment right now is more brands are going direct-to-consumer or developing an accelerating strategy around how they can engage and maintain that touchpoint with the consumer themselves and also comes along with a horde of data. In this era for JCPenney, how are you maintaining those brands within your stores to know that consumers can also find those brands within the JCPenney experience?
MARC ROSEN: Yeah, so in our stores, we actually have about a 50/50 mix between our private label brands and our national brands, so private label brands, like Stafford, that bring a great value to the customer. And then we have national brands. For our national brand partners, that's really important. We have brands in the store like Levi's. We have brands in home like Cuisinart. And we have many brands that we've now brought into our JCPenney beauty.
We partner with our brands together. But it's really important that for the customer they're really looking for a mix of both.
- JCPenney CEO Marc Rosen, thanks so much for taking the time here with us ahead of the holiday season. We know it's a busy period for you guys over there.
MARC ROSEN: Thank you for having me.
