J. C. Penney Targets $200 Billion Hospitality Industry with B2B Strategy

Analyst Walter Loeb said the initiative “makes a lot of sense”
May 19, 2017Andrea Lillo

Marvin EllisonMarvin Ellison
PLANO, Texas—J. C. Penney looks to expand on its home refresh growth initiative with a new B2B strategy, offering solutions for the hotel and lodging industry and the multi-unit industry.

Citing its long history of designing and sourcing high quality home textiles along with its recent re-entry into the major appliance market—and hotel operators’ large volume purchases of bedding, bath and window treatments from its website—the retailer feels it’s well positioned to expand into the hospitality segment.

“While we continue to take steps to improve our apparel strategy and assortment, we see our Home Refresh initiative as a great vehicle for growth and differentiation,” said Marvin Ellison, chairman and CEO of J. C. Penney. “The U.S. hospitality industry represents approximately $200 billion [according to STR Inc. 2017 HOST Almanac] annually and a significant opportunity for J.C. Penney to gain market share and drive increased revenue per customer with major appliances and a renewed focus on soft home goods.” The J.C. Penney B2B solution also provides custom window treatments, furniture and mattresses.

Retail analyst Walter Loeb of Loeb Associates, said, “It’s outside their expertise, but at the same time, they’re going more into the home, home furnishings and appliances.” Supplying the hospitality industry “makes a lot of sense. It can become a growth factor for them.” He added that J.C. Penney was “excellent” in the home category until about 2011-2012 [under former CEO Ron Johnson], when they went from about 24 percent of sales from the home category to about 8 percent. Now “J.C. Penney is moving from a fashion company to a home furnishings company.” It needs “new revenue and new momentum—they’re seeking newer ways to build something with their franchise,” Loeb said.

The J. C. Penney B2B program will leverage the company’s nationwide fleet of brick-and-mortar stores and its vast supply chain network to meet the needs of small business owners and connect with local communities. Ellison said it is staffing an outside sales force for this business.

“Our entry into the B2B program reinforces our home refresh initiative, while providing new and innovative ways to achieve sustainable growth and profitability,” Ellison said. “Our broad assortment of private brands in soft home give us a unique cost and value advantage in this new and exciting space.”

Andrea LilloAndrea Lillo | Senior Editor
alillo@hfnmag.com

Andrea Lillo has written about a variety of topics, from beer gardens in Queens to kitchen design trends to residential caves. Having joined Home Furnishings News in 2006, she serves as Fashion Editor.

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