JCPenney Is Developing a New Beauty Concept — What Happens to Its Sephora Partnership?

JCPenney has revealed that it is working on a new beauty venture following the announcement of partner Sephora’s collaboration with rival department store Kohl’s.

The retailer confirmed today with FN that it was “developing a new, inclusive beauty concept” that would provide shoppers with “a wide array of product.” It did not provide more details but shared that the launch is part of advancing its previously announced turnaround plan to “offer compelling merchandise, drive traffic and deliver an engaging experience” for customers.

“We look forward to unveiling this new concept, which will be enhanced by our Salon offerings, to provide an improved beauty experience,” a spokesperson for the company wrote in an email to FN. “Until then, we will continue to faithfully serve our customers through SiJCP [Sephora in JCPenney].”

JCPenney’s partnership with Sephora extends back 15 years. However, over the spring, the alliance between the beauty juggernaut and Plano, Texas-based chain appeared to be threatened: JCPenney filed a temporary restraining order against Sephora in an attempt to prevent it from purportedly exiting a long-term contract early, and Sephora responded with an emergency motion to dissolve. Ultimately, the two parties agreed to “mutually beneficial revisions” to their existing deal in an effort to settle the legal dispute.

Sephora currently operates about 650 shop-in-shops inside JCPenney’s outposts. According to the JCPenney spokesperson, their partnership “remains strong” and will continue until the end of the agreement in late 2022.

However, the future of JCPenney remains uncertain: Just over three weeks ago, the business — which filed for bankruptcy in mid-May — announced the approval of its sale to mall owners Brookfield Asset Management Inc. and Simon Property Group, as well as its debtor-in-possession and first lien lenders. Still, some experts maintain that the chain could continue to see many of the same struggles it faced prior to the pandemic, such as declining sales and accelerating digital competition.

What’s more, Sephora and Kohl’s announced just days ago that they have forged a 10-year strategic partnership that would see the personal care and cosmetics giant open 850 permanent units spanning 2,500 square feet apiece inside Kohl’s stores by 2023. The news came a month after Target and Ulta struck a deal to launch 1,000-square-foot shop-in-shop destinations at 100 Target stores in 2021, “with hundreds more locations opening in coming years.”

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