February 12, 2008
Penney and Polo Ralph Lauren Launch Exclusive Line
J.C. Penney is getting ready to kick off the biggest exclusive brand launch in its history on Feb. 24 with the American Living line from Polo Ralph Lauren.
The line, which will only be sold by Penney, is initially being introduced to consumers in the chain’s women’s, men’s, children’s, home and luggage departments in stores and online. Eventually the American Living line and its flag and eagle logo will have items in every one of Penney’s 40 departments.
How well the American Living line is received remains to be seen with a launch that coincides with a period in time when consumers have been pulling back on their purchases.
Penney president Ken Hicks isn’t worried. He told The Dallas Morning News, “I think the timing is actually great. I’d be more worried if we were entering challenging times and didn’t have something like this. It positions us to take away from the competition.”
Analyst Walter Loeb of Loeb Associates offered an initial review of the American Living line. “The merchandise is superbly made and finely detailed, with good design and fabrics of high quality. It’s very saleable and wearable,” he said. “I will probably buy some of the jackets in men’s suits.”
Mr. Loeb can see the American Living line helping Penney compete for customers who normally shop at rival department stores such as Macy’s “but probably not a Bloomingdale’s shopper.”
Penney’s move is a definite nod to more upscale shoppers, an approach it has taken before with lines such as Nicole by Nicole Miller, Bisou Bisou and Chris Madden. The retailer has also done well with the Sephora store-within- a-store concept.
Katheryn Burchett, Penney’s director of American Living implementation, has high expectations for the brand. “Half of America already shops J.C. Penney, but our research shows she shops in one or two departments. But this brand will encourage her to shop across the store.”
Discussion Questions: Does Penney have a hit or a miss on its hands with the American Living line from Polo Ralph Lauren? How might it affect the retailer’s image? What do you think about the timing of the launch?
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J.C. Penney is unexpectedly and serendipitously benefiting from some of the mis-steps Macy’s made in regional markets, which sent customers out looking for a new retail “home.” Many of those customers have found Penney’s to be quite to their liking and far different and more interesting than the Penney’s of old. The timing of the introduction of this new Lauren line could not be better for Penney’s.
Only time will tell if J.C. Penney has a hit or miss with the American Living line, however, the fact that Ralph Lauren has teamed up with J.C. Penney says a lot about the retailer. In my perception (as well as expectations) this retailer has moved up whereby I would not mind visiting J.C. Penney before going to Macy’s and do some comparison shopping before buying any home furnishings. Until now, I would have gone straight to Macy’s only!
It’s smart for J.C. Penney to use Lauren’s design capability to enhance their offering of better-priced classic apparel and home goods, just as Kohl’s partnered with Lauren on Chaps a couple of years ago. Short-term, Penney may find that aspirational price points find some resistance in today’s economic climate, but long-term it will probably be a good move. Penney does have a challenge (like other stores ramping up their exclusive brands) to edit its assortments and brand offerings better than today, to help American Living stand out from the crowd.
This may as much be a sign of the times for Ralph Lauren. I had always heard that RL would not sell its Polo line to Penney’s, leaving it for upscale merchants. But as it did for Levis, economics and times change. The days of being fat and happy are over for everyone.
Just goes to show you where Ralph is at….
There’s no question that exclusive brand distribution is currently the strongest competitive weapon in the department store arsenal. Mizrahi for Target and Mossimo are great examples.
But the level of cobranding on this one bothers me a bit. How “exclusive” does “American Living by Polo Ralph Lauren for J.C. Penney” really sound? At a minimum, it’s a mouthful. Success with this one may depend more on how much the combined brand owners spend behind developing the “American Living” brand rather than its Ralph Lauren heritage.
Does anyone remember Halston? No good can come of this for Ralph Lauren.
It is difficult to generate criticism in advance. The reports I have read do not indicate an excessive price point gap, nor do they indicate a “value” perception obstacle. Fine fabrics and quality make are important to certain consumer groups, and almost invisible to others. Many retailers have erred in providing a quality level in excess of the ability of the target consumer to appreciate. Apparently, that is not the case with this line.
Expectations are probably the most challenging part of the life cycle of this brand launch. Given the environment, the slowdown in footsteps and the crunch in spending, as well as the timing of the introduction (late February???) would argue for keeping inventories tight and sales expectations modest.
Seldom is an adventure of this type truly determined in the initial product season…good sell through or bad. Too often retailers will abandon such an effort in the face of a disappointing first season, but I do not believe that to be the JCP management approach. They will give this line enough time to establish itself in the collective consciousness, market it sufficiently to achieve awareness, and in all probability, if RL delivers on its track record, will achieve a solid level of sales volume and sell-through velocity.
I totally agree. They’ve made great strides in the store experience as well as the product offerings…the change is remarkable. Prior to these changes, it’s doubtful that this would have gone down. But now that they have evolved the brand sufficiently, it seems like a very validating move that can only stimulate traffic and brand preference. Also, in light of similar activities with brands like Converse now at Target, it seems like a good competitive move.
If the goal is to capture the Macy’s or Dillard’s customer with quality at a reasonable price point, I think the line can do the job–assuming the right communications, targeted at the right audiences.
If it were me, I’d do a lot of in-mall promotion. Any marketing plan is going to spend most of its efforts communicating with the customer at home or online, and hoping s/he’ll make a special trip to visit a J.C. Penney store either for the first time or after a long hiatus. But that’s a big habit change for a lot of people.
But if I’m a customer already in the mall, and I happen upon a live fashion event–or I get an invitation to a live fashion event that’s at a mall where I’m comfortable, even if I’m not comfortable at the JCP that’s already in that mall–then I have a chance to experience the line in neutral territory and be surprised at the quality and style. I’d also have some print collateral around–a magalog that shows everything that was in the live show and drives the customer to the web for more.
(I realize we don’t want to spend money on print when we can drive web traffic, but the data shows we still like our magazines and catalogs–even when we drag them to the computer to punch in the URLs that those pubs have so kindly included.)
Anyway, back at the mall, having seen the merchandise on neutral ground, I can feel good about coming into the store and shopping the line while I’m there. Or, if I still need more time, I can take my magalog home and get used to the idea of shopping at JCP gradually.
Only, the merchandise has to come in my size.
I keep reading that half of American women are size 14 and above. If that’s true across all income segments, I suspect the proportion is higher in the middle of the scale–the J.C. Penney demographic, which doesn’t have the option of making thinness its full-time job.
So why would Penney stop the American Living line at misses 16?
I think they’d do a ton of business in women’s sizes, and Lauren already knows that market at the higher end. In fact, my favorite black corduroy boot cuts are Lauren Woman from Dillard’s.
One caveat: A minute ago in the paragraph above, I suggested Lauren/Penney interpret the styles for women–but, actually, I, at least, don’t want interpreted styles. I’d prefer the real styles, translated exactly, except maybe for some stretch mixed into the pants fabrics, and inseams that reflect the reality of sensible shoes.
Too often, when a fashion line decides to interpret itself for plus sizes, it interprets all the panache right out of the clothes, and we’re left with the product of someone’s idea of what a plus-size woman should wear–not at all the same thing as the original designer’s collection. How ’bout we stop doing that and just make the real clothes fit our real bodies?
Ah…I remember a similar pairing long ago…Gitano and Kmart. That didn’t work out so well–for either party.
The Ralph Lauren/Penney’s collaboration speaks to a larger trend: the fast-moving world of retail has moved beyond traditional “private label” and into lifestyle branding, and from ownership to partnership; a new world in which retailers and brands do what they do best rather than pretending that everyone can do everything.
Wal-Mart’s most recent change in the apparel division (moving sourcing and product development to New York) isn’t about favoring the Big Apple over Bentonville, it’s about taking less ownership of manufacturing by re-partnering with suppliers who do it best, and augmenting private label by partnering with brands that come with instant consumer awareness. If that means licensing brands rather than owning brands (a la Op), then so be it.
Macy’s partnered with Zoom Systems and J&R Electronics knowing that they need to be relevant in consumer electronics while acknowledging that they don’t have the expertise, or time, to build the category internally.
The premise of Lauren’s Global Brand Concepts (a concept in no way intended to remain a Penney’s-only project) is that Ralph Lauren’s well-honed brand development expertise has earned him the cred to churn out proprietary power brands for specific retailers without putting his name or logo on the products he creates. As for Penney’s, in spite of their terrific private brand building track record (Arizona anyone?) rather than arrogantly plowing ahead with a sea of self-created brands, they had the wisdom to partner with the king of lifestyle brand creation for their biggest power launch.
Remember all of the nay-saying about Penney’s partnership with Sephora? J.C. Penney knows when to say “Don’t try this at home!”
The merchandise has already started arriving in the stores. I went to my local mall to check out the line and was pleased with the fit, quality, styling, and pricing. Though the styling was unmistakably Ralph, there was nothing stating “by Ralph Lauren” on the product, the signing, the fixtures, or on the website. This is the same strategy RL used when they decided to distribute Chaps exclusively at Kohl’s (prior to that, “Chaps by Ralph Lauren” had wide department store distribution).
In their newer and remodeled stores, JCP is doing a good job of highlighting brands like Sephora and Bisou Bisou so they stand apart from the sea of fixtures filled with more moderate fare. However, in my local, older, un-remodeled JCP, the American Living product was smashed in among the rest of the apparel. My biggest shock though was finding this brand new product already signed “Buy 1 get the 2nd at 50% off.” Why would they already be discounting their “premier” brand??? Discounting the brand upon arrival was unnecessary. They could have at least designed the promotion to be “Take advantage of introductory pricing.”
Aside from the discounting I think JCP should have a long term winner with American Living. It is just aspirational enough for the moderate crowd and will certainly pull some moderate business from Macy’s. I’m excited about the marketing launch (during the Academy awards). If you haven’t already, I urge you to look at the launch video on the jcpenney.com website.
I am a big fan of CEO Mike Ullman. He has done a masterful job converting a once-stodgy and irrelevant retailer into a successful multi-channel retail force. American Living will be another win.
In the same way Target successfully leverages respected designer brands, the strategy could work for JCP.
RL needs to protect his brand portfolio to ensure future success for his higher tier brands, and brand JCP enjoys the desired equity transfer, accompanying traffic and increased cross shopping/CAP.
Both Penney’s and Macy’s, through their continuous promotions, have trained their customers to primarily buy on sale. They, along with the department store segment, have become mass merchants to the middle market, and their marketing message–intended or otherwise–has been price, price, price. Their customers are middle market price customers.
Penney’s partnership with Ralph Lauren adds a brand to the assortment mix, but it doesn’t change the underlying dynamic. Any increase in market share is likely to be short lived. At best, this program gives them a nationally recognized name, wrapped into a captive label, to promote. Their customers are still going to be waiting for it to go on sale.
If Katheryn Burchett’s desire comes true and J.C. Penney shoppers expand their departmental selections, then American Living by Ralph Lauren will be a home run, assuming the license fees are reasonable. If J.C. Penney comp sales increases get no lift, then the license fees, no matter how low, are too much. Since J.C. Penney and Ralph Lauren are both public companies, the world will know the profit impact to both firms. I doubt there will be any sales damage to the other Ralph Lauren brands, since the price points are typically a multiple of the J.C. Penney prices.
I find Polo and RL products to be of poor quality and durability. The only thing of high quality in them is their price at other stores. On the other hand, if J.C. Penney really knew how to market their own products they may have something. Over the holidays, I went there for ‘a pair’ of pants. One. I ended up with eight. Their $79.50 pants were $15 bucks. Awesome clothing at below discount prices. I hadn’t purchased from their line in years but would do so again. I have no desire for Polo or RL and would hope they could do even better than they are with their own brands. If they do, they’d really have something. I was not only impressed with the quality but also with the service. I doubt that I would get the price again, but who knows.
It befuddles me why department stores that already have exclusivity want exclusivity from someone else. I see no history of success here and do not expect this endeavor to run to the contrary of others past experience. When you have all you need and still can’t market it, that is the real problem. Ralph can’t help with that.
I’m giddy with anticipation. Truly! James Cash Penney and Polo’s Ralph Lauren? A match made in Heaven! Perhaps they can both speak to us from there.
Seriously, though, am I the only one who regularly observes dying retail clothing franchises “reaching for the stars” in efforts to rehabilitate their fashion images? In the words of Donna Summer, “Who do you think you’re fooling?” And, how important are fashionable images to these tired old chains?
Who’s minding the intravenous drip and listening for last gasps?
I also am a Huge fan of Mr. Ullman and I really like JCPenney! I can not believe the changes over the last decade at the retailer and the changes have been sharper and more intense over the last few years. Recently, I myself have rediscovered JCP as an option!
They do need to worry about price point but this IS a line by RL so everyone will know that it WILL be more expensive and JCP has other offerings which are more price oriented. I think this can add to the overall view of JCP by the average customer as a place with affordable style. This move will, even to a higher degree, present JCP as a primary thought in the minds of potential (mid tier department store) customers as Target is primary for many discount store shoppers. This reflects the management and leadership of Mr. Ullman and his team. I believe this will be good for JCP. I HOPE it is really good for JCP.
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J.C. Penney is unexpectedly and serendipitously benefiting from some of the mis-steps Macy’s made in regional markets, which sent customers out looking for a new retail “home.” Many of those customers have found Penney’s to be quite to their liking and far different and more interesting than the Penney’s of old. The timing of the introduction of this new Lauren line could not be better for Penney’s.
Only time will tell if J.C. Penney has a hit or miss with the American Living line, however, the fact that Ralph Lauren has teamed up with J.C. Penney says a lot about the retailer. In my perception (as well as expectations) this retailer has moved up whereby I would not mind visiting J.C. Penney before going to Macy’s and do some comparison shopping before buying any home furnishings. Until now, I would have gone straight to Macy’s only!
It’s smart for J.C. Penney to use Lauren’s design capability to enhance their offering of better-priced classic apparel and home goods, just as Kohl’s partnered with Lauren on Chaps a couple of years ago. Short-term, Penney may find that aspirational price points find some resistance in today’s economic climate, but long-term it will probably be a good move. Penney does have a challenge (like other stores ramping up their exclusive brands) to edit its assortments and brand offerings better than today, to help American Living stand out from the crowd.
This may as much be a sign of the times for Ralph Lauren. I had always heard that RL would not sell its Polo line to Penney’s, leaving it for upscale merchants. But as it did for Levis, economics and times change. The days of being fat and happy are over for everyone.
Just goes to show you where Ralph is at….
There’s no question that exclusive brand distribution is currently the strongest competitive weapon in the department store arsenal. Mizrahi for Target and Mossimo are great examples.
But the level of cobranding on this one bothers me a bit. How “exclusive” does “American Living by Polo Ralph Lauren for J.C. Penney” really sound? At a minimum, it’s a mouthful. Success with this one may depend more on how much the combined brand owners spend behind developing the “American Living” brand rather than its Ralph Lauren heritage.
Does anyone remember Halston? No good can come of this for Ralph Lauren.
It is difficult to generate criticism in advance. The reports I have read do not indicate an excessive price point gap, nor do they indicate a “value” perception obstacle. Fine fabrics and quality make are important to certain consumer groups, and almost invisible to others. Many retailers have erred in providing a quality level in excess of the ability of the target consumer to appreciate. Apparently, that is not the case with this line.
Expectations are probably the most challenging part of the life cycle of this brand launch. Given the environment, the slowdown in footsteps and the crunch in spending, as well as the timing of the introduction (late February???) would argue for keeping inventories tight and sales expectations modest.
Seldom is an adventure of this type truly determined in the initial product season…good sell through or bad. Too often retailers will abandon such an effort in the face of a disappointing first season, but I do not believe that to be the JCP management approach. They will give this line enough time to establish itself in the collective consciousness, market it sufficiently to achieve awareness, and in all probability, if RL delivers on its track record, will achieve a solid level of sales volume and sell-through velocity.
I totally agree. They’ve made great strides in the store experience as well as the product offerings…the change is remarkable. Prior to these changes, it’s doubtful that this would have gone down. But now that they have evolved the brand sufficiently, it seems like a very validating move that can only stimulate traffic and brand preference. Also, in light of similar activities with brands like Converse now at Target, it seems like a good competitive move.
If the goal is to capture the Macy’s or Dillard’s customer with quality at a reasonable price point, I think the line can do the job–assuming the right communications, targeted at the right audiences.
If it were me, I’d do a lot of in-mall promotion. Any marketing plan is going to spend most of its efforts communicating with the customer at home or online, and hoping s/he’ll make a special trip to visit a J.C. Penney store either for the first time or after a long hiatus. But that’s a big habit change for a lot of people.
But if I’m a customer already in the mall, and I happen upon a live fashion event–or I get an invitation to a live fashion event that’s at a mall where I’m comfortable, even if I’m not comfortable at the JCP that’s already in that mall–then I have a chance to experience the line in neutral territory and be surprised at the quality and style. I’d also have some print collateral around–a magalog that shows everything that was in the live show and drives the customer to the web for more.
(I realize we don’t want to spend money on print when we can drive web traffic, but the data shows we still like our magazines and catalogs–even when we drag them to the computer to punch in the URLs that those pubs have so kindly included.)
Anyway, back at the mall, having seen the merchandise on neutral ground, I can feel good about coming into the store and shopping the line while I’m there. Or, if I still need more time, I can take my magalog home and get used to the idea of shopping at JCP gradually.
Only, the merchandise has to come in my size.
I keep reading that half of American women are size 14 and above. If that’s true across all income segments, I suspect the proportion is higher in the middle of the scale–the J.C. Penney demographic, which doesn’t have the option of making thinness its full-time job.
So why would Penney stop the American Living line at misses 16?
I think they’d do a ton of business in women’s sizes, and Lauren already knows that market at the higher end. In fact, my favorite black corduroy boot cuts are Lauren Woman from Dillard’s.
One caveat: A minute ago in the paragraph above, I suggested Lauren/Penney interpret the styles for women–but, actually, I, at least, don’t want interpreted styles. I’d prefer the real styles, translated exactly, except maybe for some stretch mixed into the pants fabrics, and inseams that reflect the reality of sensible shoes.
Too often, when a fashion line decides to interpret itself for plus sizes, it interprets all the panache right out of the clothes, and we’re left with the product of someone’s idea of what a plus-size woman should wear–not at all the same thing as the original designer’s collection. How ’bout we stop doing that and just make the real clothes fit our real bodies?
Ah…I remember a similar pairing long ago…Gitano and Kmart. That didn’t work out so well–for either party.
The Ralph Lauren/Penney’s collaboration speaks to a larger trend: the fast-moving world of retail has moved beyond traditional “private label” and into lifestyle branding, and from ownership to partnership; a new world in which retailers and brands do what they do best rather than pretending that everyone can do everything.
Wal-Mart’s most recent change in the apparel division (moving sourcing and product development to New York) isn’t about favoring the Big Apple over Bentonville, it’s about taking less ownership of manufacturing by re-partnering with suppliers who do it best, and augmenting private label by partnering with brands that come with instant consumer awareness. If that means licensing brands rather than owning brands (a la Op), then so be it.
Macy’s partnered with Zoom Systems and J&R Electronics knowing that they need to be relevant in consumer electronics while acknowledging that they don’t have the expertise, or time, to build the category internally.
The premise of Lauren’s Global Brand Concepts (a concept in no way intended to remain a Penney’s-only project) is that Ralph Lauren’s well-honed brand development expertise has earned him the cred to churn out proprietary power brands for specific retailers without putting his name or logo on the products he creates. As for Penney’s, in spite of their terrific private brand building track record (Arizona anyone?) rather than arrogantly plowing ahead with a sea of self-created brands, they had the wisdom to partner with the king of lifestyle brand creation for their biggest power launch.
Remember all of the nay-saying about Penney’s partnership with Sephora? J.C. Penney knows when to say “Don’t try this at home!”
The merchandise has already started arriving in the stores. I went to my local mall to check out the line and was pleased with the fit, quality, styling, and pricing. Though the styling was unmistakably Ralph, there was nothing stating “by Ralph Lauren” on the product, the signing, the fixtures, or on the website. This is the same strategy RL used when they decided to distribute Chaps exclusively at Kohl’s (prior to that, “Chaps by Ralph Lauren” had wide department store distribution).
In their newer and remodeled stores, JCP is doing a good job of highlighting brands like Sephora and Bisou Bisou so they stand apart from the sea of fixtures filled with more moderate fare. However, in my local, older, un-remodeled JCP, the American Living product was smashed in among the rest of the apparel. My biggest shock though was finding this brand new product already signed “Buy 1 get the 2nd at 50% off.” Why would they already be discounting their “premier” brand??? Discounting the brand upon arrival was unnecessary. They could have at least designed the promotion to be “Take advantage of introductory pricing.”
Aside from the discounting I think JCP should have a long term winner with American Living. It is just aspirational enough for the moderate crowd and will certainly pull some moderate business from Macy’s. I’m excited about the marketing launch (during the Academy awards). If you haven’t already, I urge you to look at the launch video on the jcpenney.com website.
I am a big fan of CEO Mike Ullman. He has done a masterful job converting a once-stodgy and irrelevant retailer into a successful multi-channel retail force. American Living will be another win.
In the same way Target successfully leverages respected designer brands, the strategy could work for JCP.
RL needs to protect his brand portfolio to ensure future success for his higher tier brands, and brand JCP enjoys the desired equity transfer, accompanying traffic and increased cross shopping/CAP.
Both Penney’s and Macy’s, through their continuous promotions, have trained their customers to primarily buy on sale. They, along with the department store segment, have become mass merchants to the middle market, and their marketing message–intended or otherwise–has been price, price, price. Their customers are middle market price customers.
Penney’s partnership with Ralph Lauren adds a brand to the assortment mix, but it doesn’t change the underlying dynamic. Any increase in market share is likely to be short lived. At best, this program gives them a nationally recognized name, wrapped into a captive label, to promote. Their customers are still going to be waiting for it to go on sale.
If Katheryn Burchett’s desire comes true and J.C. Penney shoppers expand their departmental selections, then American Living by Ralph Lauren will be a home run, assuming the license fees are reasonable. If J.C. Penney comp sales increases get no lift, then the license fees, no matter how low, are too much. Since J.C. Penney and Ralph Lauren are both public companies, the world will know the profit impact to both firms. I doubt there will be any sales damage to the other Ralph Lauren brands, since the price points are typically a multiple of the J.C. Penney prices.
I find Polo and RL products to be of poor quality and durability. The only thing of high quality in them is their price at other stores. On the other hand, if J.C. Penney really knew how to market their own products they may have something. Over the holidays, I went there for ‘a pair’ of pants. One. I ended up with eight. Their $79.50 pants were $15 bucks. Awesome clothing at below discount prices. I hadn’t purchased from their line in years but would do so again. I have no desire for Polo or RL and would hope they could do even better than they are with their own brands. If they do, they’d really have something. I was not only impressed with the quality but also with the service. I doubt that I would get the price again, but who knows.
It befuddles me why department stores that already have exclusivity want exclusivity from someone else. I see no history of success here and do not expect this endeavor to run to the contrary of others past experience. When you have all you need and still can’t market it, that is the real problem. Ralph can’t help with that.
I’m giddy with anticipation. Truly! James Cash Penney and Polo’s Ralph Lauren? A match made in Heaven! Perhaps they can both speak to us from there.
Seriously, though, am I the only one who regularly observes dying retail clothing franchises “reaching for the stars” in efforts to rehabilitate their fashion images? In the words of Donna Summer, “Who do you think you’re fooling?” And, how important are fashionable images to these tired old chains?
Who’s minding the intravenous drip and listening for last gasps?
I also am a Huge fan of Mr. Ullman and I really like JCPenney! I can not believe the changes over the last decade at the retailer and the changes have been sharper and more intense over the last few years. Recently, I myself have rediscovered JCP as an option!
They do need to worry about price point but this IS a line by RL so everyone will know that it WILL be more expensive and JCP has other offerings which are more price oriented. I think this can add to the overall view of JCP by the average customer as a place with affordable style. This move will, even to a higher degree, present JCP as a primary thought in the minds of potential (mid tier department store) customers as Target is primary for many discount store shoppers. This reflects the management and leadership of Mr. Ullman and his team. I believe this will be good for JCP. I HOPE it is really good for JCP.