JC Penney rises on word of strong Izod sales
NEW YORK (AP) — Shares of J.C. Penney Co. rose Wednesday after PVH Corp. said Izod mini-shops inside Penney stores are doing good business.
THE SPARK: PVH sells clothing brands including Calvin Klein, Izod and Tommy Hilfiger, and the company reported strong third-quarter results on Tuesday. That included solid growth in Izod revenue.
"The Izod J.C. Penney store openings are performing and doing very well for the last three months," PVH Chairman and CEO Emanuel Chirico said on a conference call with analysts and investors. During a television appearance Chirico added that sales of Izod clothes at Penney's shops have been very strong and his company is pleased with the results of the store concept.
THE BIG PICTURE: Starting Sept. 1, J.C. Penney started opening mini-shops within its stores to sell Izod and Liz Claiborne clothes as well as Levi's and Arizona Jeans. The boutique-style format will continue rolling out over the next two years. Earlier this month, Penney said that so far it has converted about 11 percent of its floor space to these shops and that area has on average generated $269 per square foot — or more than double the revenue per square foot in the rest of the store.
Penney plans to bring in more mini-shops featuring Martha Stewart, Michael Graves and others next spring. In total, the company plans to add 100 shops inside each of 700 stores by 2015.
Penney's sales have declined in four of the last five years. The company is trying to improve its revenue by revamping its merchandise, pricing and the look of its department stores, but in recent quarters the retailer has reported large losses and lower sales.
SHARE ACTION: Shares of J.C. Penney rose 80 cents, or 4.6 percent, to $18.32 in afternoon trading. Since trading above $43 in February the stock has dropped dramatically, reaching a three-year low of $15.69 on Nov. 16.
