Under recent ownership and management, JCPenney Co. is “getting its mojo back” with a game plan that’s coming into sharper focus.

While many have debated whether Penney’s can maintain relevance after three a long time of top-level management change, strategy shifts and reversals, meddling by shareholder activists and personal equity owners, there’s recent life within the venerable retailer within the aftermath of its purchase by Simon and Brookfield Property Partners in 2020 for $800 million, lifting the business out of bankruptcy and cleansing up the balance sheet.

In a wide-ranging interview, Marc Rosen, Penney’s chief executive officer, laid out Penney’s evolving game plan, and an enormous a part of it seems to center on efforts to capture more customers within the 20-to-40-year-old demographic through a battery of recent strategies. At the identical time, Penney’s must maintain its older, traditional base and working-class family appeal.

Among the many strategies: the rollout of JCP Beauty departments with its inclusive mixture of masstige, prestige and mass brands from recent, emerging and established firms, to all 660-plus stores within the aftermath of the Sephora defection to Kohl’s, a direct competitor. It’s virtually finished, Rosen said. “As of last Friday, we accomplished the last round of sentimental launches.”

Rosen also underscored that Penney’s is pursuing additional collaborations with designers and celebrities, and has been advancing its private label programs by reducing redundancies and sharpening what each existing label stands for, while adding recent ones. It’s an effort to solid a more modern, fashionable image and supply greater exclusivity.

As well as, Rosen said that the Plano, Texas-based Penney’s is:

While the fleet has stabilized at 660 stores after years of closing lots of of units, there’s an eye fixed toward some further closings, relocating stores to higher sites, and even opening some recent ones in certain markets, though the web store count, in accordance with Rosen, should kind of remain stable.

“We now have roughly the correct variety of stores in total,” Rosen said. “In some cases we want to optimize, location-wise. So there are some locations in cities where we’re in a mall or shopping mall where we may not wish to be anymore, and also you’ll see us relocate a few of that. There are other places where we don’t have coverage where we could go right into a city,” with a recent store. “So I feel you will note some adds. A few of those deals are getting solidified straight away. Net, net, though, 660 is roughly the correct number, between 650 and 700, for us to have the ability to achieve the shopper.”

On Tuesday, David Simon, chairman, president and CEO of the Simon Property Group, the nation’s largest manager and developer of shopping centers, said Penney’s “has its mojo back,” during his conference call with analysts following the discharge of Simon’s positive first-quarter results. Inside Simon’s Other Platform Investments (OPI) group, Penney’s and the SPARC three way partnership between Simon and Authentic Brands Group stays profitable, he said.

“The retail a part of OPI we expect to be profitable in Q2 and Q3, however the overwhelming majority (of the profit) can be in Q4. Retailers will all have tough comps for the primary quarter. The fourth quarter can be a lot better. That does create somewhat volatility for us,” Simon said. SPARC includes Aéropostale, Brooks Brothers, Eddie Bauer, Endlessly 21, Lucky Brand, Nautica and Reebok.

On Wednesday, Penney’s CEO Rosen elaborated on the retailer and its mojo.

“We’re getting traffic back into the stores and really driving customer frequency,” Rosen told WWD. “The exciting thing is starting in late summer and the autumn of last yr, we saw that tick up last yr and proceed through the vacation season, for the primary time in five years. There are a whole lot of things driving that. I might start with assortment,” Rosen said.

He cited the sweetness rollout, the relaunch of the Worthington private brand and other in-house brands to higher differentiate each, and the launch of recent private brands, notably Mutual Weave, Penney’s first men’s denim lifestyle collection, which happened in February 2022, and the exclusive iMPower by Prabal Gurung for JCPenney collection of dresses and jumpsuits that launched this spring.

“Michelle has really clarified our product assortment,” Rosen said, referring to Penney’s chief merchandising officer Michelle Wlazlo. “Mutual Weave filled an enormous gap within the assortment (with) jeans, khakis, polos, T-shirts, colours, woven shirts. That brand has been super strong and grown significantly.”

He added that the house area is “really, really key,” citing Distant Lands, a line featuring colourful towels and bedding that was launched a yr ago. “It’s geared toward the younger customer,” Rosen said. Home represents about 10 percent of Penney’s volume. Rosen said that while sales growth in house is seen, it’s not expected to grow as a percent of the general business. The home-based business may benefit from the bankruptcy and shuttering of Bed Bath & Beyond, which was a competitor.

Rosen said that last yr, men’s and ladies’s apparel, home and footwear “all took market share.” How does he know that? “We take a look at our growth, competitors’ growth and at market share data,” from research firms akin to NPD.

Rosen told WWD that last yr Penney’s volume was just over $8 billion, and flat against 2021 excluding the sweetness business, which has been in transition. Penney’s volume peaked in 2006 at over $20 billion.

The corporate selectively revealed another financial results for 2022, indicating that adjusted earnings before interest, taxes, depreciation and amortization exceeded $500 million; liquidity stood at $1.6 billion for a healthy money flow; gross margin stood at 36 percent, and that there was lower than $500 million in debt at the top of January. The most recent quarterly figures on Penney’s weren’t available. Penney’s has about 50,000 employees.

“We feel like we’re within the strongest position that the corporate has been in lots of, a few years,” Rosen said.

“1 / 4 to a 3rd of the purchasers shopping JCPenney Beauty and iMPower are recent customers to JCPenney,” Rosen said. “The client is responding and likewise shopping other areas of our store. We now have seen some recent customer growth in that.

“ our customer segments, overall we’re very fortunate we do have a large age range. We now have a classic customer that’s somewhat more traditional. They’ve shopped our brand for a very long time and are engaged in our bank card program and things like that. But we even have the younger customer shopping things like Endlessly 21,” at Penney’s. “As we take a look at our future growth a whole lot of it should come from the younger group. Beauty is an enormous a part of that.”

Rosen explained that much of this yr’s $250 million in cap-ex can be dedicated to improving the shopping experience at about 75 stores, with remodels, recent technology for the centralized checkouts and associates’ mobile devices.

“We wish to make sure that there may be a far more mobile-friendly experience in the shop,” Rosen said. “With the mobile device, associates could have the power to access product information and availability.” For instance, if someone got here to the shop in search of a selected Stafford suit and the correct size wasn’t available, associates would have the ability to find out if that suit was available online or at one other Penney’s store and might be delivered to the shopper’s home or to the shop the shopper just shopped. The system can be piloted in 31 stores this yr and subsequently expanded through the chain.

Asked if Simon was funding Penney’s, Rosen responded, “We’re absolutely running on our own.” He added that Penney’s has a clean balance sheet, with low debt, at lower than $500 million, and generates strong money flow. “The restructuring put us able of stabilizing our operations and having the ability to make sure that we’re driving each sales and profits.”

Regarding the outlook for 2023 when it comes to sales, Rosen said, “It has continued to be a difficult yr for the purchasers with every thing happening with the economy and inflation. Overall for the industry straight away, traffic is the challenge. At the identical time there may be a possibility for us to grow and take share by offering the perfect value within the marketplace. We’re ensuring we’re price competitive.”

Since joining Penney’s 18 months ago from Levi Strauss & Co. where he served as executive vice chairman and president of Levi Strauss Americas, “We’ve really defined areas we’re going to give attention to,” Rosen said. “Initially, the massive focus is on the shopper and ensuring we’re driving long-term, profitable, sustainable customer growth. The main target is on ensuring we’re communicating to them in regards to the unique reasons to return shop JCPenney.” That entails spotlighting the private label brands, the loyalty program and simplifying its messaging. He also cited personalizing communications to customers as a priority.

One other priority is “ensuring we’ve got the correct product in the correct place so we will get to it quickly,” Rosen said. From the time a customer places a web-based order, “We’ve brought the speed all the way down to the three- or four-day delivery range,” he added. Efforts are being made at “optimizing our transportation and achievement,” Rosen said. Getting the merchandise out of distribution centers and delivered faster to stores and customers will result in fewer markdowns, he said.

Rosen also said that the corporate is working to assist customers understand the worth is embedded in its products. “They’re in search of coupons and deals. We’ll mix those with our loyalty program and our mobile app, and help customers understand up front what they’re paying. It’s about ensuring the shopper understands the worth we offer.”

Apart from improvements in the shop, Rosen said that Penney’s has been transforming its website experience, implementing changes progressively since last summer. He said there may be a recent home page, and the web site is doing a greater job telling product stories, akin to how one can create outfits.

“Digital penetration is over 30 percent,” in comparison with about 25 percent a yr ago. Asked how much digital sales could grow as a percent of the entire business, Rosen said, “At the top of the day, the shopper will resolve,” though he added he expects “it’s going to settle around that 40 percent level. Stores still play an enormous role for patrons and there are lot of categories, like beauty, suiting, dress-up where customers wish to are available.”

As a part of being an omnichannel retailer, Rosen said that Penney’s can be “ramping up” its buy online, pick up in store service. “We want to drive customer awareness” on that, he said.

As well as, “We’re other collaborations in men’s dress-up, and in home in areas like cooking,” Rosen said. “We wish to do those collaborations with individuals who grew up shopping at Penney’s. It’s vital.” He said he preferred to carry off revealing any upcoming collaborations.

By way of product sales, Rosen said there was strength in most apparel last yr and that continued through the primary quarter of this yr, specifically in dress-up categories akin to men’s suiting, including the long-standing Stafford or J. Ferrer private brands, in addition to in dress-up shirts. Dresses have also been selling well, from casual to formal styles, and in such labels as Worthington and Ryegrass, a two-year-old private brand that for Penney’s customers offers a more elevated, flirty and female look. He also touted the iMPower by Prabal Gurung collaboration as “super stylish and really relevant with dresses priced at $59, $69 and $79 price points. “It’s great dress-up product.”