big news for loblaws but too bad JC Penny is such a ghetto dept store
Loblaw’s Joe Fresh hooks up with J.C. Penney
MARINA STRAUSS - RETAILING REPORTER
Grocer Loblaw Cos. Ltd. is making a big retail bet in the United States with its Joe Fresh fashion line, amid slowing spring sales of its cheap-chic offerings in a sluggish Canadian apparel market.
On Wednesday, Loblaw said it will roll out almost 700 Joe Fresh shops next spring within troubled U.S. department-store retailer J.C. Penney, getting close to achieving its goal of running as many as 800 Joe Fresh stores across the United States.
Loblaw’s four-year deal with J.C. Penney emerged as the country’s largest grocer reported that its second-quarter Joe Fresh sales failed to get a lift from a year earlier. What’s more, teaming up with J.C. Penney is a risky step. The U.S. company is struggling through a massive makeover under Ron Johnson, a retail star who took the top job late last year after launching tech giant Apple’s iconic stores. The latest deal raises the stakes for Loblaw and Joe Mimran, creative director for Joe Fresh.
“It’s a gamble – of course it’s a gamble,” said Walter Loeb, president of retail consultancy Loeb Associates in New York and a former director of Hudson’s Bay Co., noting that Mr. Mimran has taken chances before. “I think this is going to be a winner.”
Joe Fresh has been one of the few engines of growth for Loblaw, which has been scrambling over the past six years to return to its glory days. Now the grocery titan is racing to find more ways to pump up its Joe Fresh business and feeling the heat to make its J.C. Penney partnership work.
Loblaw is counting on J.C. Penney’s Mr. Johnson and his vision to reinvent the department store with specialty shops such as Joe Fresh and a new pricing strategy, emulating his success in re-imagining electronics retailing for Apple.