It didn’t take long for incoming JC Penney chief Ron Johnson to fire an explosive first shot in his mission to remake the department store chain.
JC Penney isn’t merely developing Martha Stewart boutiques for its stores. By acquiring a 17% stake in Martha Stewart Living Omnimedia, Penney also bought some insurance it needs to have more say in the merchandising, licensing and retail distribution of the Martha Stewart brand.
That makes it difficult to comprehend any scenario in which JC Penney and Macy’s can share the Martha Stewart brand.
Macy’s grip on Martha Stewart housewares and home fashions seems tenuous only five-plus years since Macy’s Terry Lundgren orchestrated the blockbuster deal that lured Stewart from Kmart.
An angry Macy’s could try to contest the JC Penney deal. Or it could try to justify the expendability of its Martha Stewart program by citing spotty success and the brand’s proliferation at retail.
Today’s resurgent Macy’s probably figures it has cultivated an overall platform strong enough to keep customers Stewart helped attract. But losing the Martha Stewart brand to JC Penney would still sting a Macy’s group that poured millions into cultivating the brand’s department store relevance. And replacing the brand could become a costly diversion.
To JC Penney, meanwhile, the upside of its Martha Stewart partnership could be huge.
At first glance, Martha Stewart might not seem to be the hippest cornerstone in the plan by Johnson— whose Target and Apple Stores stops were defined by cutting-edge merchandising innovation— to make JC Penney more attractive to young home- and family-starters whose shopping loyalty will be critical to the chain’s long-term success. Don’t be surprised, though, to discover Stewart actually appeals to the increasingly conservative sensibilities of many of these budding consumers.
Rebuilding A Foundation
Stewart might be just the type of broad-reaching linchpin JC Penney needs to start rebuilding a foundation that can support its traditional shoppers and that all-important next generation.
JC Penney’s core middle-America markets are populated by many who aspire to Stewart’s contemporary yet homey lifestyle perspective. Meanwhile, she sprinkles in just enough cosmopolitan credibility capable of appetizing the chain’s big-market urban/suburban base.
If Kmart at first seemed to be too much of an old-line discount store for Stewart, and Macy’s at first seemed to be too much of a fashion department store for Stewart, then perhaps JC Penney fits just right for Stewart.
Bells and whistles won’t recharge JC Penney, and Ron Johnson knows it. His resumé of unconventional ideas has always been grounded in solid merchandising fundamentals that pair consumers and brands by exploiting their interaction on emotional and practical levels.
Martha Stewart might not seem so groundbreaking to all those retail pundits out there expecting Johnson to turn JC Penney inside out. They might, however, one day credit JC Penney’s all-in move with Martha Stewart as a radical game-changer for the retailer.
At the root of all of this is the resilience and magnitude of Martha Stewart and her eponymous brand. Stewart’s conspiracy conviction at the time her home products were being sold at Kmart hardly smudged her brand’s appeal or slowed her empire’s growth.
Now she is the compelling centerpiece of an intensifying rivalry between two of the most important department store operators in the country.
The industry eagerly awaits Ron Johnson’s next shot. And Terry Lundgren’s, too.