Improving the sales productivity of the home department will be a key strategic focus for J.C. Penney this year, according to CEO Myron Ullman III.

Speaking in a conference call to financial analysts following the release of the retailer’s fourth-quarter and fiscal-year results, Ullman said of the home area, “We’ve made great strides over the last year, but there’s still more room for improvement. We’re refining our home presentation in-store to improve the customer shopping experience, better utilize the space and to improve sales productivity.”

Ullman added that J.C. Penney is testing “attractions” such as a Bassett shop in the furniture department, along with Hallmark cards and gifts. “And we continue to explore additional opportunities like these,” he said. In addition, home is a “traffic driver” both in J.C. Penney stores and on jcp.com. “At its peak, sales of home merchandise was over 50 percent of our dot-com sales,” he said. “While we don’t intend to get back to that level as we grow our apparel business online, we know that home is an important part of our ongoing omnichannel strategy.”

Home also plays a crucial role in the retailer’s return to print marketing, in the form of the 120-page catalog of home merchandise J.C. Penney will drop next month. It will be the first home catalog for the retailer in nearly four years. Replying to a question from analyst Bob Drbul of Nomura Securities, Ullman said the discontinuation of home from J.C. Penney’s catalogs may have cost the retailer as many as 10 million customers.

Ullman said home was one of the best-performing departments for J.C. Penney, both in-store and online, in 2014. Net sales for the fiscal year totaled $12.3 billion, up 3.4 percent and including a 4.4 percent pickup in same-store sales. In the fourth quarter, net sales rose 2.9 percent to $3.9 billion, including a 4.4 percent same-store sales gain.

J.C. Penney also narrowed its loss for the fiscal year from $1.4 billion to $771 million. In the quarter, the retailer posted a net loss of $59 million, compared to net income of $35 million for the fourth quarter of the prior year.-David Gill

Source:HFN