Nation & World

J.C. Penney shifts from appliances

Strategy change also includes cutting furniture from U.S. stores

J.C. Penney shifts from appliances cutting furniture sales
Bloomberg

Shoppers browse appliances at the J.C. Penney store inside the Roosevelt Field Mall in Garden City, N.Y.
Bloomberg Shoppers browse appliances at the J.C. Penney store inside the Roosevelt Field Mall in Garden City, N.Y.
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J.C. Penney Co. plans to stop selling major appliances as new CEO Jill Soltau overhauls the troubled department store chain.

The retailer also will end sales of furniture in U.S. stores and will sell the category online.

These changes take effect Feb. 28, the company said Wednesday.

Soltau, who stepped into the role in October, began a mission to streamline the 116-year-old retailer, closing underperforming stores and clearing out slow-moving goods to kick-start sales and improve margins.

The company made the move to “better meet customer expectations, improve financial performance and drive profitable growth,” it said in a statement.

“Optimizing the allocation of store space will enable us to prioritize and focus on the company’s legacy strengths in apparel and soft home furnishings, which represent higher margin opportunities,” it said.

Former CEO Marvin Ellison had led the move into appliances in 2016, and the strategy was costly to implement because the company had to train employees or hire new ones who could sell the products.

The idea was to fill the void left by Sears Holdings, which hadn’t yet filed for bankruptcy but already was reining in store count.

But J.C. Penney wasn’t alone. Home Depot and Lowe’s expanded their appliance offerings, and even Bloomingdale’s jumped into the market late last year — adding some high-end LG Electronics Inc. products, such as refrigerators and washing machines.

J.C. Penney eventually would push appliances into about 600 stores.

Meanwhile, furniture, including couches and bedroom sets, was being sold in about 100 locations.

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It’s now pulling most furniture, except from select Puerto Rico stores. Mattresses will continue to be available in more than 450 physical locations, the retailer said.

Trent Kruse, J.C. Penney’s head of investor relations, said on a conference call with analysts in November that appliances were among product categories that underperformed in the third quarter.

Same-store sales, a key gauge of a retailer’s health, slumped 5.4 percent in the three months that ended Nov. 3 — far worse than the 0.8 percent decline projected by analysts.

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