J.C. Penney to Raise Bet on Private Brands

J.C. Penney Co. outlined its long-term strategy, saying it will step up its focus on exclusive and private brands such as Liz Claiborne and St. John's Bay to drive growth.

At its analyst day on Wednesday, Penney said it expects exclusive and private brands to comprise 70% of sales by 2019. The company generated 52% of its merchandise sales from private and exclusive labels last year.

The department-store operator has refocused on the brands after former Chief Executive Ron Johnson's failed effort to reinvent the chain phased some of them out.

"We've sharpened our priorities for the next three years," Chairman and CEO Marvin R. Ellison said. Penney said it is targeting per-share earnings of $1.40 to $1.55 by 2019 and is aiming for comparable sales to increase at a 3% compounded annual rate. Penney reported an adjusted per-share loss of $1.03 last year and expects to turn a profit this year on an adjusted basis.

The retailer's turnaround plan also includes increasing its offerings of special apparel sizes and expanding its women's beauty offerings, such as expanding the number of locations with in-store Sephora shops. Penney plans to revitalize its home department, including previously announced plans to resume selling appliances.

The analyst day comes after Penney last week reported a narrower quarterly loss and stronger sales for its latest quarter, a departure from its department-store rivals.

Department stores have reported falling profits and lower sales as shoppers are increasingly turning to discount chains and online operators such as Amazon.com Inc. for their clothing and apparel needs. In response, store operators have closed locations and aggressively reduced expenses.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

August 17, 2016 18:05 ET (22:05 GMT)

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