Thursday, February 21, 2008

Penney’s Ullman Bets on American Living

In the Old West, according to movie lore, the hero rode into town on a white horse. He stood for strong traditional virtues, like family, hard work and honest value for the dollar.

This being the 21st century, the new American hero rolled onto the stage at Skylight in New York City on a Segway, a motorized scooter. At least that’s how Myron “Mike” Ullman, CEO of J.C. Penney, made his appearance Tuesday night at the debut of American Living, Penney’s biggest product launch ever.

Ullman uses a Segway to get around because of a physical condition that limits his mobility. But his ability to tap into the core of Penney’s customers is in no way impaired. Building on a turnaround foundation laid by predecessor Allen Questrom, Ullman has expanded Penney’s position as a true alternative to traditional department stores and specialty stores. By bringing to Penney Sephora, a company he ran before joining Penney, Ullman did what Questrom could not. He layered on a cosmetics option that brings female customers into the stores over and over.

With American Living, Ullman adds another coup. Developed, designed and produced by Polo Ralph Lauren, but with no mention of that pedigree in any marketing campaign, American Living is meant to be an “aspirational” choice across 40 different merchandise categories, from apparel to home furnishings, said Ullman.

The brand will officially launch with TV ads during Sunday’s Oscar Awards. Merchandise will appear in 600 of Penney’s top department stores across the country.

Will it work?

Probably, if the quality is there and Penney promotes it aggressively and often. Given Polo Ralph Lauren’s and Penney’s history, it’s fair to assume positive responses to both assumptions.

Particularly during these troubled economic times when customers are looking to trade down in price points while retaining as much quality and value as possible, American Living may well appeal to Penney’s existing public and to the new shoppers it wants to attract with products that have a Ralph Lauren look and feel but don’t mind that the merchandise doesn’t carry his signature Polo horse logo.

The company hopes that within five years American Living produces annual sales of at least $1 billion.

—Murray Forseter

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