J.C. Penney's (JCP) Home Goods Section Is Not The Money-Maker Former CEO Ron Johnson Imagined

 @AlexCKaufman
on July 18 2013 4:17 PM
J.C. Penney Store Revival
J.C. Penney store. REUTERS

The revamped home-goods department of J.C. Penney Company Inc. (NYSE:JCP) has only added to the ailing retailer's woes.

The home business -- recently revamped with a stable of designer brands including Jonathan Adler, Michael Graves, Sir Terence Conran and Martha Stewart -- dropped to 12 percent of total sales last year, a 30 percent drop, the Dallas Morning News reported Thursday.

And on Wednesday, the company's senior vice president and general merchandise manager over the home division, Paul Rutenis, left after a year on the job.

Rutenis was poached from Dick's Sporting Goods in May 2011, just before Ron Johnson took over as Penney's chief executive officer. He had served as the sport retailer's vice president for furniture and decorative accessories.

But like several other top executives -- some of whom were brought in to realize Johnson's vision of a thriving home-goods department -- he is now out of the job, BuzzFeed reported.

"While new management is far more realistic than previous management about what it is attempting to do, the challenge remains daunting in the near term," Michael Exstein, a retail analyst at Credit Suisse, wrote in a note. 

"Our overwhelming impression was that the home launch may have actually added to the challenges in front of management [rather] than serving as a catalyst for improved traffic and merchandise perception," he added.

Now, J.C. Penney is flooding its circulars with coupons to discount the appliances and cooking ware that seem incapable of selling themselves.

A Michael Graves-designed toaster, once $86, is now marked down to $59.99. A cast-iron braising pan once supposedly worth $160 now goes for $111.99.

A spokesperson for J.C. Penney did not immediately respond to calls and emails from International Business Times requesting comment.

J.C. Penney stock price was up 0.36 percent on Thursday afternoon to $16.62, though shares were down 18 percent this year so far.

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