J. C. Penney Company Inc. has put a stake in the ground.
In a bid to lure more shoppers to its doors, the struggling retailer has introduced St. John’s Bay Outdoor, a new line that builds on the existing men’s private brand. The collection — which features “rugged” shirts, jackets and pants — debuts tomorrow in the chain’s about 600 stores as well as its e-commerce site.
As part of the launch, JCPenney is also setting up an outdoor shop online and in select 100 outposts, which will carry the St. John’s Bay Outdoor brand as well as three performance activewear labels American Threads, Hi-Tec and The American Outdoorsman. The stores-within-a-store, spanning roughly 800 square feet, will open on Oct. 4.
“With this expansion, JCPenney is taking part in the nearly $900 billion outdoor recreation industry by offering functional, durable apparel with our customer expectations at the core, all at an incredible value,” said chief merchant Michelle Wlazlo.
The move comes at a troubling time for the beleaguered company, whose credit rating has been downgraded twice in the last seven months by financial services firm S&P Global. It has also been added to Fitch Ratings’ “loans of concern” list, with the agency noting that the chain was at a high risk of defaulting on a $1.57 billion loan balance. (Filings with the U.S. Securities and Exchange Commission put JCPenney’s debt at roughly $4 billion.)
In the second quarter, JCPenney managed to reduce its losses from $101 million the prior year to $48 million, or 15 cents per share. However, sales declined more than expected, dropping 7.4% to $2.62 billion — compared with analysts’ forecasts of $2.69 billion. Months of slumping earnings reports have subsequently sent its share price below $1 this year, putting the Plano, Texas-based company at risk of delisting from the New York Stock Exchange.
JCPenney has already hired advisors to explore debt restructuring options to buy itself more time for a turnaround, with CEO Jill Soltau leading the push to close underperforming stores and hiring new talent to revive the business. The retailer also recently partnered with online consignment giant ThredUp to sell a selection of its secondhand apparel and accessories at 30 JCPenney stores.
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