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Is J.C. Penney’s New Look Making Customers Do Double-Takes?

April 17, 1989

DALLAS (AP) _ J.C. Penney, the retailer historically known for sturdy clothes at reasonable prices, has started using fashion-touting adjectives like chic and stylish to lure more trendy people into its 1,700 stores.

But Penney doesn’t want to alienate the tried and true - its traditional, middle-income customers and catalog browsers.

So to achieve its goal of becoming the department store of choice for today’s ego-sensitive - mostly women - shoppers, Penney has decided to be as up-to-the-minute as possible. It also may start nudging up prices.

″The idea of commiting for six months or a year out just doesn’t make sense because no one is that smart,″ said David F. Miller, J.C. Penney Co. Inc. vice chairman and chief operating officer.

The retail industry is ″moving toward more flexibility,″ Miller said. ″We think we can improve information systems. With communication information, we can shorten the time frame it takes us to respond.″

During an interview at the retailer’s headquarters, Miller pointed to what appears to be a picture of a sweater hanging on his wall. It’s a facsimile sent from Hong Kong showing a sweater’s fine knit with remarkable clarity.

″Still imaging″ as it’s called, a Sony creation tested by Penney, will save the time it historically has taken to duplicate samples from foreign suppliers before mass production. The technique saves air shipping costs, too.

It is an example of the technology Penney intends to use increasingly to help condense the merchandising process.

In another example, Penney’s buying specialists in the main office use an internal network to televise samples of clothing and linens to store-based staff.

By beaming images of goods to stores nationwide, Penney eliminates the need for meetings around the country and saves the cost of preparing multiple samples.

After watching the live satellite broadcasts, stores can select what they think their customers want instead of having to peddle a package of goods assembled by buyers back at headquarters.

Miller said manufacturers like the still imaging and direct broadcasts because they deliver instant feedback.

No new-fangled technological gizmo will make a difference, though, if shoppers don’t spend money in Penney stores.

For women who may feel more comfortable in specialty clothing boutiques, Penney has been trying to give its stores an upscale look. About a third have been revamped so far and all are due for a facelift by 1990.

″We’re trying to do all the things that make you feel better about making that purchase decision,″ said Miller.

Making shoppers feel good about what they’re buying may mean charging a little bit extra, as Penney discovered in introducing a line of cosmetics in Washington-area stores. Marketing research indicated that with ego-satisfying products like cosmetics, people tend to equate quality with cost.

Barger Tygard, director of merchandising, said Penney has been upgrading in-house labels and developing new departments based on what company research indicated people look for in a department store. Some of these departments are: -Traditional, for shoppers who favor classic styles.

-Updated, for the fashion-forward who fancy stylish lines.

-Conservative, for the price-sensitive who want the basics.

-Juniors, for coeds or first-jobbers who desire affordable fashions.

-Young Juniors, for girls wanting the latest thing in clothes.

The ″store-within-a-store″ is an element of the strategy Penney adopted in 1987 when it restructured. To make room for more women’s apparel, it stopped carrying home electronics, sporting goods and photographic equipment. The hard goods are still available through its catalog.

Although Penney plans further reliance on a private label lineup - featuring names like the Fox, Hunt Club, and Dividends - it will carry a limited number of national brands. Prices are aimed at middle and upper-middle income shoppers.

Penney thinks it earned a place on the fashion map when it started offering designs by Halston in 1982. Penney’s Halston III collection was carried for five years.

Retail industry analysts have given Penney mixed reviews. They say the company has set itself the tricky task of trying to woo dedicated followers of fashion while not alienating the double-knit set.

One retailing analyst speaking on condition of anonymity said Halston III was a bomb - or maybe just ahead of its time for a retailer borne in the no- nonsense coal mining towns of the Western United States during the early 1900s.

″Penney shouldn’t overstep the taste level of traditional customers,″ this analyst said. ″Middle America - that is how I would think of the Penney customer.″

In a highly brand-conscious world, status seekers may prefer having an alligator or a polo pony on their shirts, believing Penney’s critters might make them seem less with-it.

″Would you want someone seeing you wearing a J.C. Penney label?″ asks the analyst.

Some analysts say Penney shot itself in the foot by relocating headquarters to Texas from New York because it lost valuable middle-management merchandising experts.

Others say the wounds were slight and the company has recovered already. A few are more charitable.

William Smith of investment firm Smith Barney, Harris Upham & Co. says he’s neutral for now on investing in Penney’s stock but the company has a good shot at accomplishing its goals.

″It’s something of a gamble but they’re not changing their image all that much,″ said Smith. ″I would worry if they were abandoning their traditional consumer. Basically, Penney is sort of a private label department store where you get decent quality for the money.″

Michele Y. Davis, an analyst at Oppenheimer & Co., recommends buying Penney stock.

″The company is becoming better managed and better merchandised,″ said Davis. I think they have the ability to gain market share over time.″

Miller of Penney said there’s no confusion about the company’s mission. Based on annual sales and number of stores, J.C. Penney is among the country’s five biggest retailers.

″There’s no longer a question about battle lines,″ Miller said. ″Sears has announced that they’re in competition with Wal-Mart and K mart. We’ve said clearly that our competition is the traditional department store and specialty store in the regional mall.″

End Adv for Sunday, April 16

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