Department Stores Deepen Focus on Private Label, Exclusive Brands
Department stores sharpened their focus on private label and exclusive products in Q2 ended July 29. Macy’s, Kohl’s, J.C. Penney and Nordstrom, all having closed stores in the face of sluggish sales, each spotlighted private label and exclusive brands in their reports and executive comments:
- Macy’s now carries more than 20 private label brands and plans to increase exclusive products to 40% of its merchandise mix by year-end, up from 29% in Q2, CEO Jeffrey Gennette said. Among these is a new apparel collection from designer Anna Sui that is due in Q4 as part of Macy’s proprietary International Concepts (INC) brand.
- Kohl’s still carries an assortment of licensed brands – Mudd, Tony Hawk and others – but the largest sales improvement in Q2 from the previous quarter came in its proprietary brands, CEO Kevin Mansell told analysts. The gains were driven by Kohl’s quickening the pace of inventory delivery to keep pace with changing trends and “our effort to focus on our largest and most important private brands,” including Sonoma and Croft & Barrow. And two of Kohl’s exclusive licensed labels — Simply Vera Wang and Lauren Conrad — posted double-digit sales increases offsetting declining sales other women’s apparel, namely sportswear, Chief Financial Officer Bruce Besanko said. Kohl’s also has benefitted from the addition earlier this year of Under Armour, sales of which have so far boosted same-store sales by 0.75%, Besanko said.
- At Nordstrom, three of its top five selling brands during an anniversary sale that ran July 23-Aug. 6 were private labels, executives told analysts. Nordstrom plans to increase private labels as a percentage of its revenue going forward, Nordstrom’s Peter Nordstrom said. “I think particularly as time goes on, it’s pretty clear that we have to find ways to distinguish ourselves and our offer,” Nordstrom Co-President Peter Nordstrom said. “It’s important that we can do what’s within our control and it’s definitely part of our plans going forward that we’ll find ways to leverage that and grow the [proprietary] business.”
- J.C. Penney has launched exclusive Project Runway apparel in 500 stores and will have a full assortment available by early September, J.C. Penney CEO Marvin Ellison said. The retailer currently has apparel inspired by Project Runway Season 15 winner Erin Robertson positioned at the front of its stores and also will field collections from Season 16 and 17 winners. Season 16 starts Aug. 17. The collections are part of a licensing agreement with Project Runway producer The Weinstein Co. J.C. Penney also is readying a low-pried City Streets apparel label this fall along with designer Libby Edelman’s footwear, handbags and apparel in September. J.C. Penney’s InStyle-licensed beauty salons also were among the “stronger performing” divisions in Q2, the company said. The Salon by InStyle was launched at 15 J.C. Penney stores in 2015 as the retailer began rebranding its beauty salons. Another 50 locations were added earlier this year.
Macy’s, Karen Huget, Chief Financial Officer, 513-579-7000, Karen.email@example.com
Kohl’s, Bruce Besanko, Chief Financial Officer, 262-703-7000, firstname.lastname@example.org
Nordstrom, Anne Bramman, Chief Financial Officer, 206-828-2111
J.C. Penney, Andrew Drexler, Interim Chief Financial Officer, 972-431-1000