Penney to expand major appliances to half of its stores
New York — J.C. Penney says it will start to sell major appliances online and expand its rollout of the category to nearly 500 stores, or almost half of its stores, this summer.
The move comes after a successful test of offering major appliances such as washing machines and refrigerators in 22 markets in February. Penney got out of the major appliance business more than 30 years ago.
Penney also said Monday that that it exceeded its own goal for one measure of profit. Its shares edged up in midday trading Monday.
Penney, based in Plano, Texas, is looking to rebuild sales, particularly in the home area, after a catastrophic reinvention plan under former CEO Ron Johnson resulted in sales and profits in free fall in 2012 and 2013. Business has been stabilized since then. But revenue has still not returned to the pre-Johnson era levels.
The home appliance business represents a big opportunity for Penney since it’s been one of the hot areas in retailing as it benefits from a strong housing market.
The move also comes as department stores look to reinvent themselves as they wrestle with growing competition from online leader Amazon.com as well as from off-price stores like T.J. Maxx.
“The pilot confirmed that we should not limit our business to apparel and soft home in order to achieve significant revenue growth,” CEO Marvin R. Ellison said in a statement.
Penney also announced that it will be allocating another 25 percent of floor space to an enhanced presentation of window coverings including ready-made curtains, blinds and shades. It will be also testing new initiatives with Ashley Furniture and Empire Today, a leader in the installed carpet and flooring industry.
Penney said that it exceeded its earnings before interest, taxes, depreciation and amortization for the first quarter. It also reiterated its full-year guidance for that measure of $1 billion. It is expected to report its first-quarter results Friday.
Shares rose 6 cents to $8.32 in midday trading on Monday. Its shares are down 2 percent since a year ago.