JCP Is Traveling Many Roads to Exclusivity: Maybe Too Many?

Implications: 1.  Over the years, Penney has developed  a solid core of proprietary product in ladies' apparel (e.g., Worthington, St. John's Bay), men's (Stafford, SJB), and kids. 

2. These steady, middle-of-the-road private labels very much defined JCP in good years and bad. They are reinforced by moderate brands such as Sag Harbor, Alfred Dunner, Designers Originals, Dockers, Levi's, Van Heusen, Jockey, Izod, and others.

3. Recently, JCP has been on a tear to establish exclusive vendor programs and partnerships in ladies, men's, kids, accessories, home (American Living from Ralph Lauren Global Brand Concepts), cosmetics (partnership with Sephora), ladies and men's  (Claiborne's Liz & Co and Concepts) and intimate apparel (Ambrielle).

Analysis: That leaves JCP with a lot of brand building on its plate. Based on recent efforts by competitors, the challenge is significant. Dillard's went very-private label in intimate apparel and struggled to establish brand recognition and value benchmarks.

Kohl's has been hard pressed to establish its Lauder-produced lines such as American Beauty and Flirt; in all fairness, the Lauder/Kohl's connection is pretty subtle, and Penney/Sephora probably has an edge.

Liz & Co. will very likely work for Penney; the potential is sufficient to upset department store competitors.

American Living is a huge endeavor; unlike the nice job Kohl's has done with Chaps, an established label at launch, JCP is starting from scratch.

Department stores have struggled to build outstanding, productive proprietary brands; the more likely candidates for success in the JCP stable are those such as Liz & Co and Sephora, which come with brand recognition. Exclusivity, while a constantly tempting reward, almost always makes consumer awareness more difficult to achieve.