Keeping Up with the Competition

Implications: 1. J.C. Penney's recent decision to build Polo Ralph Lauren's American Living into a storewide brand is not unexpected based on the success competitor Kohl's has achieved with the Chaps brand in men's, misses, and kids. 

2. Don't kid yourself--Penney's and Kohl's watch each other like hawks.

3. However, Penney's may face a  bigger challenge getting the line off the ground; Chaps was a viable and reasonably familiar name when Kohl's launched the brand in men's.

Analysis: With out-the-door apparel, average unit retails (AUR) that most likely only slightly exceed those of Kohl's and, are well below those of moderate competitors such as Macy's, Penney is out to increase the average sale, broaden the customer base, and differentiate itself from the competitive pack. These are priorities JCP has identified in the past, frequently with less than stellar results; trade up efforts reached an extreme years ago with Halston. However, we're looking at a different, more strategically grounded Penney operation now.

Hence, the move to leverage American Living into a storewide brand makes sense, especially based on the Kohl's Chaps experience, which started off strong from the first launch ad. Success is hardly guaranteed. Land's End failed to bring Sears to the promised land. May didn't get off the ground with House Beautiful throughout the home store; and this is a big new challenge for RL's Global Brand Concepts.