It's Deja Vu All Over Again With J.C. Penney
Ugh. Didn't we just go through this and decide this isn't how we wanted to run the business?
J.C. Penney has announced it will open 565 store-within-a-store boutiques featuring exclusive Disney toys, collectibles, and kid's clothes. Ranging in size from 800 to 1,100 square feet, these shops represent part of the legacy turnaround model started by ousted CEO Ron Johnson, who believed these mini-department stores within the broader JCPenney environment would create a mall-like atmosphere that would keep shoppers shopping.
Included in that theme were barber shops where kids could get free haircuts, just like the old days, and free Wi-Fi, just like the, er, new days. Maybe it was Johnson's background at Apple that brought about these changes (though I don't recall anyone getting haircuts while visiting the Genius Bar), but there was a certain incongruity to some of the ideas.
That Wi-Fi, for example, sounds like a cool concept, except department stores are set up for shopping, not sitting around on the Internet. As the company was finally forced to admit, the resource was underutilized. The retailer did away with the Wi-Fi last month in a bid to save some $7 million a year.
Similarly, the boutiques were intended to create spaces for today's modern customer. Along with "shops," as they were called, featuring displays built around brands, there were iPads available for customers to browse through collections, much like you would see if you walked into an Apple store: iPads here, iPhones over there, Macs on the side. And just like Apple employees, rather than standing behind cash registers, Penney clerks would be armed with iPads to implement mobile checkout while the registers would be eliminated.
But rather than dragging the venerable retailer into the 21st century, these moves kicked the chain to the curb with shoppers who felt alienated in this alien, modern store. In the end the retailer gave up on this too, and the registers are coming back.
J.C. Penney, though, is still trying to steal some of the Magic Kingdom's brand halo and equity. The project announced a year ago was first brought to Penney's online store; today, with characters from Monsters University, Toy Story, and Tangled, it will roll into hundreds of physical locations.
While it's being launched with the typical breathless fanfare each innovation has seen -- the Disney Shops "will be a major draw in our kids department" (just like Wi-Fi was going to be a foundational core of the new Penney's) -- there is something to be said for the cachet that accompanies the House of Mouse. And since these won't be generic Disney products found everywhere else, it could be an attractive addition.
Had Penney gone in this direction from the beginning, it might have averted much of the disaster that accompanied the other changes it made. Shoppers didn't need a Levi's boutique, an Arizona shop, and a Buffalo store to sell denim, but a stand-alone Disney store with unique and exclusive items certainly seems smart.
Although critical of many of the moves Penney's has been making, I've jumped off the criticism bandwagon, believing instead the retailer has hit bottom and is now ready for a recovery. A Disney boutique may be just the thing to put a little magic back in its performance.
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The article It's Deja Vu All Over Again With J.C. Penney originally appeared on Fool.com.Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, and Walt Disney. The Motley Fool owns shares of Amazon.com, Apple, and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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