Roughly 300 analysts and investors descended upon J.C. Penney’s secret prototype store in Dallas Wednesday as CEO
Ron Johnson continued to reveal his plan to transform the department store chain.
The visitors, mostly from New York, traveled in tour buses from J.C. Penney’s Plano corporate office and gathered in a crowded space waiting for Johnson to appear.
“It’s like waiting for the President,” said one analyst who was getting anxious.
They’re all here to see a 30,000-square-foot mock up of what a J.C. Penney store will look like with unique branded shops. While Johnson obviously isn’t the president, his plans for J.C. Penney (NYSE: JCP), mainly to have 100 branded shops by 2015, are being watched closely.
“We’re not here to improve, we’re here to transform,” Johnson said. It’s a common slogan for Johnson.
That transformation could end up being a giant case study or it could, as Johnson says, transform the way America shops.
The prototype, which Johnson calls “an art project,” contains shops that already exist in 700 stores, like Levi’s and Liz Claiborne, but it also gives insight into what’s to come: wider aisles, self checkout, tables with iPads and coffee bars.
As analysts enter the space, Dallas-based Paciugo Gelato passes out samples and J.C. Penney’s recently announced Disney kids’ store is on display.
Executives such as Chief Operating Officer
Michael Kramer and Chief Merchant
Liz Sweney entertain analysts. J.C. Penney’s largest investor, and a cheerleader of Johnson,
Bill Ackman, also works the room.
“It’s a fun day for us,” Sweney said.
Paciugo, along with Minneapolis-based Caribou Coffee, has not officially been announced as a shop in J.C. Penney stores, but it shows the potential of the variety Johnson would like to bring. Johnson, who created the popular Apple retail stores for Apple Inc. (Nasdaq: AAPL), compares the future J.C. Penney store to an iPhone.
“All those boutiques are the apps. What J.C. Penny is creating is a new interface,” Johnson said.
The old interface? It was old, dingy, outdated and low end, according to customer comments Johnson featured in his presentation – the fourth in eight months.
“This was my perception of J.C. Penney when I took this job,” Johnson said. “I think we all know that is a perception a lot of Americans have with J.C. Penney. It takes time to change people’s minds.”
Johnson said the shops are helping change minds, and comparable sales in shops are 20 percent better than the rest of the store.
“We want to be the world’s favorite place to put their brands,” said Johnson, adding that the company is even adding startups to its shop line up, like Giggle, a baby products company.
The jcp brand men’s store is one shop that has been trailing others.
“The colors might be a bit advanced, purples and oranges,” Johnson said.
But it’s the company’s attempt to get a younger customer and compete with fast fashion brands like H&M. Johnson believes the Joe Fresh shops are a good answer for that.
“We’ve got to get a younger customer, but that’s going to happen in an evolutionary way,” Johnson said.
The evolution is also going to come with more hard times for J.C. Penney, Johnson warned. He expects the back half of the year to be similar to the first two quarters. J.C. Penney reported a $147 million second quarter net loss in August.
“It ain’t gonna be easy. It’s going to take a lot of time, but that’s why we are here,” Johnson said. “The only way to be where we are was to have the courage to endure a year of transformation.”
