Is American Living Meeting Expectations At JCP?

Implications: With the recent launch of American Living, JCP is banking on this upscale privately branded line to add cache, sales, and enhanced margin that will benefit their bottom line. After reviewing the offering in-store, many questions arise about the success of the launch.  

Analysis:  The initial launch of American Living doesn’t look like it is meeting expectations. A few questions arise pertaining to the assortment itself, the initial strategy of an upscale offering at high price points and how it positions next to the other brands in the assortment. 
    The assortment itself is very basic and features an Eagle logo that appears big and cumbersome. There is nothing in the assortment that isn’t on the floor elsewhere within other brands such as Izod, Dockers, Van Heusen, or St. Johns Bay. Initially one could make the assumption based on the association with Polo that there would be some Co-Branding with Ralph Lauren or Polo, leaving you to wonder what American Living is supposed to stand for? The label itself is very American Eagle-ish looking, as is the apparel offering itself.                     
    Launching an upscale private brand at upscale price points, when their target customer is mid-America and feeling the most brunt from the mortgage crisis, energy crisis, and food inflation, could create the perfect storm for American Living. Looking at the basic Men’s polo shirt at $45.00 on sale at $29.99-34.99 compared to the Izod polo shirt on sale at $24.99, (as observed in a recent store visit), begs the question about the cache to command $5.00 more on sale and $5.00-$10.00 more at regular price without any Polo branding?                 
    It appears that other branded lines were either cut out or down to make room for American Living. What kind of performance did they enjoy? Working with vendors affords increased flexibility and support on the back end. Working with private branding sources looks great on the IMU line, but lacks support on the back end and the ability to get out of receipts if needed. From initial observations it looks like American Living won’t be selling at regular retail as it has been on sale at 25%-40% off consistently, so there will be margin erosion. American Living could end up to be a double edge sword, namely, poor sales and margin at the same time. Obviously JCP felt compelled to counteract the successful launch of Chaps at KSS with their own version, however, Chaps still has cache based on the perception that there is a Polo connection.                 +
    Initially, the launch of American Living at JCP looks like it will be a long term process and might need some re-design and re-positioning to meet expectations.