J.C. Penney Losses decrease due to In-store Sephora displays and residential goods merchandise

August 14, 2015

J.C. Penney impressed traders on Friday by way of reporting smaller-than-expected quarterly losses. the company used to be given an immense aid from its house good and high-end Sephora beauty product choices.

Shares rose with the aid of as a lot as 9 percent in early buying and selling on Friday after the corporate mentioned Q3 used to be also off to a really perfect start.

J.C. Penney has been increasing the number of stores run by widespread beauty model Sephora — owned by means of luxury large LVMH. The retailer makes use of Sephora to help appeal to high-finish customers to its bargain apparel shops.

“Having Sephora in shops helps J.C. Penney power gross sales, but it surely also encourages consumers to visit, so it helps to force customer site visitors,” stated Neil Saunders, chief executive of research firm Conlumino. “those folks may just then go on to purchase different things.”

J.C. Penney outlets began adding Sephora shops after activist investor bill Ackman tried to convey the retailer upmarket.

Sephora outlets accounted for 12 p.c of the company’s gross sales closing yr, together with girls’s accessories. J.C. Penney had 515 Sephora outlets as of Aug. 1.

J.C. Penney’s web loss fell to $ 138 million, or forty five cents per share, within the 2nd quarter ended Aug. 1, from $ 172 million, or fifty six cents per share, a yr past.

the corporate pronounced a loss of forty one cents per share whereas revenue rose 2.7 % to $ 2.88 billion. Analysts believed the company would record a loss of 7 cents per share.

At shops opened more than one year J.C. Penney pronounced a rise in sales of four.1 %, beating a three.9 percent prediction from analysts.

the company has endured to point out growth in view that abandoning its attempt to go upmarket in 2013.

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