JC Penney, Lidl and Stage Stores Branch Out to Find New Revenue Streams

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As the saying goes, necessity is the mother of invention. And retailers really need to find new lifelines these days. The result is international expansion, an off-price acquisition and a play for corporate customers.

JC Penney Giving B2B a Shot

JC Penney adopts a business to business initiative aimed at the hospitality industry that leverages its new focus on home remodels and re-entry into the major appliance market.

“Our entry into the B2B program reinforces our home refresh initiative, while providing new and innovative ways to achieve sustainable growth and profitability,” said Marvin R. Ellison, chairman and chief executive officer of JC Penney. “We are staffing an outside sales force with experience and expertise to engage targeted businesses. Our broad assortment of private brands in soft home give us a unique cost and value advantage in this new and exciting space.”

Ellison said the idea came about because JC Penney recognized that hotel operators were already ordering large volumes from the retailer online.

The company is positioning itself to be the go-to for soft home goods, window treatments, mattresses, major appliances and uniforms and workwear for the five million hotel rooms in the U.S.

Businesses will enjoy competitive discounts, bulk pricing, commercial credit offers and tax exemptions, when eligible.

Lidl Making Moves in America

As if the battle for grocery supremacy hasn’t been fierce enough with low price king Walmart competing with Amazon delivery and Target nibbling around the edges of the food and beverage category, another player is looking to take a piece of the pie.

German supermarket Lidl is set to open 20 stores in Virginia, North Carolina and South Carolina this summer. The company plans to have 100 locations dotting the East Coast by next summer.

Lidl keeps prices low by focusing on private label and a smaller selection per category. Reports say the grocer’s prices will undercut other stores by half.

“If [Wal-Mart] reacts it can cause a chain reaction for others so they don’t lose share,” Rupesh Parikh, senior food analyst for food, grocery and consumer products at Oppenheimer & Company told MarketWatch. “If others have to follow, that can be an issue.”

An issue indeed since the grocery sector is already suffering with deflationary prices.

Lidl has more than 10,000 stores and 230,000 employees in 27 countries across Europe. The chain sells groceries but also offers a range of products from tech products and kitchen gadgets to apparel and bedding.

Lidl’s archrival in Europe, Aldi, already operates 1,500 stores in 34 states in the U.S.

Stage Stores Using Gordmans as Its Entry Into Off Price

Stage Stores, which finalized the deal to acquire Gordmans’ intellectual property plus a distribution center and 50 locations in early April, revealed plans for those stores during its first quarter earnings call this week.

The Gordmans model will evolve to focus purely on off-price going forward, according to Michael Glazer, president and chief executive officer of Stage Stores.

Glazer said Gordmans “gets us into the off-price business which is obviously one of the areas of retail that has been winning in this difficult environment. The previous Gordmans business model was a hybrid between an off-price and a department store. Our intention is clearly to manage these stores as an off price concept.”

Stage Stores will also benefit from Gordmans geography. Its midwest locations are larger than Stage Stores in that region. Plus, the customer base is much younger for Gordmans. Finally, Gordmans’ success with home and gifts, which accounts for 25 percent of sales, will allow Stage Stores to become less dependent on the difficult apparel category.

The company says the transition of all Gordmans locations should be complete by holiday 2017.


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