After cloudy moments at J.C. Penny last year, Mangone, CEO of the business found the device he was seeking for. Learning from its history to re-establish its power labels' reputation, the retailer launched an apparel design center at 200 Lafayette Street, New York, a former factory that consists of exposed brick walls, arched windows and landmark status is the site for the company's bid to regain itself.
In 2012, according to its Form, 10,000 of the company's private and exclusive brands represented 53 per cent of the business's merchandise, brands that can only be found at Penney's. Ex-CEO Ron Johnson's strategy was to downsize the power labels including removing St. John's Bay women's completely and downsizing its men's section. However, currently they are being revived. If the company had followed with Johnson's strategy it would have seen figures at even lower percentage in 2013. Managone said “Customers were really surprised when we discontinued St. John’s Bay women’s. They missed it and protested that it was gone. But it came back in early March.".
Customers view few of its brands as 'national brands', referring to Worthington, Arizona, Stafford and jcp home. Adding that Liz Claiborne is yet most recognised brand in the nation. Couple of its private brands reached over USD 1 billion in revenues but Arizona is the only one in the that range still.
Penney plans to come back by promoting its private brands however it will be a huge challenge. Despite the it being a testing period, the company has strong infrastructure for sourcing, suppliers and logistics, including partnerships with manufacturers that are devoted to the company through the dark moments. The cycle time from product development to delivery in stores has been reduced and hundreds of skilled individuals are being placed at 200 Lafayette to help out with the process.
Labels like Giggle for kids, Nicole by Nicole Miller, Olsenboye and Joe Fresh (that will be included) design their products and source them to Penny's collection.
The 200 Lafayetter has 4 levels, space of 40,000 square foot and boards technical designers, CAD operators, trend & fabric teams, color and print quality control specialists etc. A showroom for its merchants that come from Plano, Texas is being created on-site for its private brands. With two private brand development sites, Mangone explains that it will give people 'lifestyle' options from a greater talent pool. New York is where several well known chains like Gap Inc, Wal-Mart Stores, Marcy's Merchandising and more have opened apparel operations. However, the latter two shutdown after they could not reach their targets.
J.C. Penny has designers in place to carry-out tasks to guide the look and attitude with the marketing and packaging concept the company is aiming for each label. The apparel will draw from middle American and urban inspirations from New York and Los Angeles. As for Worthington, Paris will be the source for its inspiration as it has always been. The product development is focused on macro-consumer trends plus, trends in fashion, colour and silhouettes. The women's apparel's concept to delivery is commonly a 35 week cycle time compared to 50 six years ago. Mangone said “From concept to delivery, we are at least competitive and in some cases faster. In women’s, we are delivering every month.”.
Last year, J.C. Penny was facing shrinking revenues and future looked bleak, adding to the problem with its executive vice president of product development Mangone left the business due to its gloomy future of its power labels, heritage brands Worthington and St. John's Bay which were being scalled and dissolved into other labels by ex-CEO Ron Johnson. Johnson was fired four months later with the company's weakening finances. Myron Ullman 3rd cameback as Penney's CEO and Mangone was also requested to return, which he accepted stating that it was a 'no-brainer' for him adding “I spent the better part of 35 years at J.C. Penney. I care about the people. I care about the company. We have great people that can drive the business. I make sure we have the right people in place and that they have the tools to be successful.”
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