No Turn On Red

Members of the family that founded and, for many years, ran the Boscov department store chain have revealed that they have bid to buy back the stores current under bankruptcy protection:

Albert R. Boscov and his brother-in-law Edwin A. Lakin are among the group who put in an offer for Boscov’s Inc., in a bankruptcy auction that culminates next week with the selection of a winning bidder, Boscov said in a report published today.

The pair, who helped run the company for decades, received multimillion-dollar buyout packages when they retired in January 2006 and handed the controls to Lakin’s son, chief executive officer Ken Lakin.

Boscov’s, you may remember, filed for bankruptcy protection in August and immediately closed 10 of their 49 stores. The remaining 39 stores are still operating under bankruptcy protection while bids are accepted that will determine the future of the company.

The deadline for bids was October 15 and more information may be revealed next week as to who the new owner will be. The other top bidder is Versa Capital Management.

I’d like to see someone buy Boscov’s who will continue to operate it. It’s a respectable mid-size department store chain. While my local Boscov’s has already closed, I hope the other 39 can remain open as long as financially feasible.

With the economy as it stands today, I can’t really imagine someone buying the chain with the intention to shut it down and sell off the real estate. There’s not a huge market for mall anchor real estate right now. Other department store chains, like Kohl’s and JC Penney, have already announced reductions in their short-term growth plans. Who else would be moving in to these locations?

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The stimulus checks have been (presumably) spent, back to school shopping is underway, and the retail sales numbers for July are in and they are, well, pretty ugly. A lot of retailers posting negative same-store-sales numbers for the month, many of them posting numbers that fell below Wall Street’s expectations. Wall Street is responding - as of 12:30, the S&P Retail Index is down around $7.

The negative results are hitting all segments of retailers - from department stores to the mall, teen retailers to mass market merchandisers. Wal-Mart posted a positive sales increase of 3.0%, but that is less than the 3.5% increase that Wall Street was looking for. Target saw same store sales drop 1.2% in the month of July and warn that August isn’t going to be much better. JCPeneny’s sales dropped 6.5% but raised their Q2 guidance “due to better than expected sell-through of promotionally priced merchandise and continued expense management measures.” Kohl’s saw a steep 10.4 drop in same store sales in the month.

Gap saw negative numbers across all brands - Old Navy down 16%, Banana Republic down 8%, and Gap North America down 6%. When are they going to spin off the Old Navy brand, sell it, and let someone else deal with the turnaround?

Teen retailers aren’t seeing the Back to School numbers they hoped for with American Eagle down 7%, PacSun was down 4%, Abercrombie & Fitch (as a company) was down 7% (with only A&F proper posting flat numbers, up 1% for the month. Hollister was down 11% - blowing away the 4.1% decrease expected by analysts), but Aeropostale saw sales jump 13%.

More coverage from CNN/Money, Forbes, and Marketwatch.

Reminder, all of July’s numbers are available to analyze over at our partner site, Retail Numbers.

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A few of the stories I’m reading and wanted to share today:

John Zogby’s got a very insightful look into the political trends of retail consumers and dives behind the numbers to make sense of it all. He looks at presidential election polling numbers, the retailers the customers shop at, and how this relates to the retailers’ branding.

J.Crew’s website has had their share of mistakes and downtime lately. Church of the Customer is talking about the apology e-mail that the retailer sent out to their customers and what this means for the company.

Matt at A New Marketing presents a clean, easily digestable definition of what social media is.

.. and finally - Starbucks is offering a $2 discount on iced beverages in the afternoon when you buy a drink in the morning. I think this is a smart move that should drive repeat business throughout the day. Besides that, I’m selfish and now look forward to saving a little bit of money on my second trip to Starbucks every day.

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Today, JCPenney has announced the launch of a new activewear line called Xersion. The line, developed, sourced, and designed by the retailer, fits in the “better” pricepoint of Womens activewear. This is one of the six brands JCPenney is launching with this back to school season.

More details are available in their own press release.

Timing of this launch is interesting as Kohl’s readies to launch their exclusive licensing agreement for activewear with Fila. Makes sense that JCPenney would want to ramp up their private label activewear offerings.

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It’s official:

Boscov’s Inc., the 9,500-employee department-store chain founded in 1911 in Reading, Pennsylvania, filed for Chapter 11 bankruptcy protection in Wilmington, Delaware, today, citing decreased consumer spending.

Boscov’s, which said in court papers that it’s the biggest family-owned full-service department store chain in the U.S., will immediately close 10 of its 49 stores. The company said it will borrow as much as $250 million from a group of lenders led by Bank of America Corp. to help it restructure.

The Associated Press has the full list of stores that are closing:

MARYLAND
Marley Station Mall, Glen Burnie
Owings Mills Mall, Owings Mills
White Marsh Mall, Baltimore

NEW JERSEY
Monmouth Mall, Eatontown

PENNSYLVANIA
Harrisburg East Mall, Harrisburg
Monroeville Mall, Monroeville
Montgomery Mall, North Wales
Oxford Valley Mall, Langhorne
South Hills Village Mall, Bethel Park

VIRGINIA
Piedmont Mall, Danville

More coverage from the Associated Press, Wall Street Journal, and Reuters.

This is a blow to the retailer that touts itself as American’s largest family owned department store. In an age of consolidation and rapid, national, retail expansion, Boscov’s was one of the last regional department store chains that we had here in the Mid-Atlantic.

I wonder how many of these locations are being scouted by JC Penney and Kohl’s.

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A racy advert for JC Penney has been making it’s way around the internet over the past few days. The ad, which won a prize at this weekend’s Cannes Lions Awards, features two teens practicing putting their clothes back on quickly before heading down to the basement for a romp. Problem is, it may not be a legitimate JC Penney ad.

Because the spot is so well made, and because someone had to enter it it at Cannes, JC Penney is blaming its ad agency, Saatchi & Saatchi. The ad agency, in turn, is pointing the finger at production company, Epoch Films of New York, which is indeed the listed entrant. There is speculation “the video may have been filmed after hours by a producer at Epoch who was working on the Penney ads for Saatchi.”

A commercial like this won’t land with the core demographic of JCP’s shoppers. But on the flip side, teens are too smart for a commercial like this. It fails on both fronts. It pisses off their core and doesn’t the brand’s desirability with teens.

This video is spreading quickly through blogs, social networks, and Twitter. The retailer will need to work quickly to counter it’s message. This is a great opportunity for them to use social media effectively and distance themselves from the video. I’d like to see the retailer working with bloggers to get their message out there. Otherwise, the video is going to continue to spread and fewer eyeballs are going to see their retraction.

Of course, this is a moot point if the retailer, in any way, authorized this advertisement. Then it’s even more of a tangled mess and the only way to resolve it is with honesty and transparency.

It will be interesting to watch how this develops over the next few days and how the retailer responds.

The advert in question is below. As a warning, it does show people dressing and undressing, so it might be slightly NSFW:

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I’ve come across a press releasing from JCPenney, announcing the release of a new downloaded desktop application called JCPToday. From their press release:

AUSTIN, Texas–(BUSINESS WIRE)–Skinkers, T3 and WTG have collaborated on the development of a unique desktop application that is helping one of America’s largest retailers, JCPenney, reach customers in a whole new way. The application, JCPToday, is designed to enhance relationships between JCPenney and its customers by delivering sales offers, new product announcements and in-depth features directly to a computer’s desktop. The application can be downloaded from www.jcptoday.com.

In essence, they’ve created a desktop calendar that allows you to keep track of things that you have to do while being reminded of upcoming sales and seeing some of the products JCP offers.

The press release intrigued me enough to download the application, but I can’t say that I’m impressed. While I appluad JCPenney for looking for different ways to reach their customer, this application seems outdated, stinks like spyware, and is short sighted in scope.

First, the good things about it:

1. I applaud retailers when they look for non-traditional ways to reach their customers. Using any sort of technology to market a retailer is a good step, since most retailers are still relying on traditional means of print, radio, and television advertising.

2. JCPenney is trying to establish a connection with the customer, reminding them to shop the entire store. As such, the application seems to not focus on any one area of the store and really tries to drive the store home, rather than individual products. Sure, there are individual products listed here, but click around and the customer gets a feel for the range of products that the store carries.

Now, my problems with this:

1. A downloadable application? What is this, 1998? In 2007, who is still trying to reach consumers with downloadable applications. Recent report states that 1 in 5 people in the world have high speed internet access. In an age of user distrust due to adware and spyware, I can’t imagine that many people are going to jump at the chance to download another application that will sit in the background of their computer and potentially hog resources and send private information to someone else. Whether or not the application actually does this is irrelevent, this is what a lot of people would think a downloadable application like this would do.

(Note: No matter how many times they put on the website that no private data is being shared or that the application isn’t spyware, how much trust do people have in corporations to actually be honest? Probably not that much. I don’t think I’m the only person to feel this way. In fact, Angelo Mandato had to develop his own uninstall application to completely get this application off of his mom’s computer. While it may not be spyware, making it hard for a user to uninstall an application is not cool.)

2. Using PUSH-technology to send information is, literally, a one way street. We PUSH the information to you that we want you to see. In an age of web 2.0, consumer-centric communities and interactive technology, people want to interact and share information. They don’t want to be spoon fed information.

3. 1 (the downfalls of a downloadable application) + 2 (the one-way communication of said application) = 3: the people who are likely going to take the time to actually download, install, and use the program are going to be consumers who are already enthusiastic about the JCP brand. This application is going to reach out to the already converted, but won’t do much to convert new people to the JCP brand. This goes back to relying on traditional advertising methods to market the retailer.

I hate to say it, but I think that this application is a failure. I do think they have a good concept for what they want to do, but I wish they would have executed it differently. How I would have done it:

1. JCP: retailer and desktop software publisher? Instead of using the time and the resources to create a new calendanr application, I would have reached out to already existing applications in order to create a co-branded service. There’s a myriad of organizational and calendar applications, and now JCP is competiting with them. In addition to already existing desktop applications such as Outlook, iCal, and Sunbird, there are plenty of web-based services, like those developed by Google and Yahoo, as well as others like 30 Boxes, Spongecell, and Remember the Milk. JCP should have reached out and attempted to integrate their marketing message into a pre-existing service.

2. Let’s say JCP reached out to everyone and no one wanted to integrate JCP branding into their service: I still wouldn’t have gone the downloable application route. Integrate the calendar application into JCP.com and brand it there. You are keeping the user on your own site and will have so many more opportunities to make the sale than by having the user in another window in a desktop application. Make it easy for the user to purchase what they want.

3. By keeping things on the web, JCP would have an opportunity to create a real interactive user community. The other day I laid out some ideas for ways Gap Inc. could integrate their sites together, and most of them apply here. Use a blog to showcase new fashion and reach out to the customer. JCP is expanding their stores and enhancing the in-store shopping experience - but not in my area. I’d love to see more about these new features and a blog would be a great area to show things like this.

But the key to the blog is interaction. With the application JCP has created, they’re able to feature items and trends but they’re not soliciting feedback and allowing the user to create their own connection to the JCP brand. This one way communication isn’t going to fly with today’s consumer. By building a community around the blog and calendanr, they would keep people coming back and, in turn, keep people coming back to their own website.

AdWeek has an article about the launch of this application with some quotes from people behind it. They seem to see this application as a way to reach already existing customers. While I have already pointed that out and agree with that, I think that they could have easily done this in a way that could really reach out to other people who don’t already shop at JCP.

I really wanted this application to be good, but I think JCP has missed the mark. If JCP had taken the concept and altered it, only slightly, they could have a real smash hit on their hands; something that would have enhanced their brand and something that other retailers would use a case study. But instead, they have an application that will most likely be thought of as intrusive spyware and will soon be forgotten.

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From Seeking Alpha:

J.C. Penney (JCP), Polo Ralph Lauren (RL) , Kohl’s (KSS), United Technologies (UTX): Cramer declares JCP a “multiyear story” because of Sephora cosmetics and the private label deal with RL, and would give the retailer the benefit of the doubt in spite of its lackluster quarter. Cramer comments JCP and KSS are stores which make customers feel “they’re richer than they are.” He predicts JCP will be up to $85 from $81.50. He added UTX has the earnings power to go to $70 from $66.

(See: Jim Cramers Stop Trading! Stock Picks and Comments, April 18)

Jim Cramer saying that Kohl’s and JCP makes customers feel “they’re richer than they are” might be the most accurate assessment of those two retailers that I have ever seen.

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A search on monster.com for “sephora manager” comes up with four opportunities at JC Penney in San Diego, Pleasanton CA, Northridge CA, and Columbus OH. During JC Penney’s Q3 conference call, they said that they were looking to add Sephora locations to 50 JC Penneys in 2007. Could these four stores be the next four to get this new shop concept?

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Woman is suing JC Penney after she was hit in the head by a mannequin while a sales clerk was removing a blouse for her. She was treated for a bleeding scalp at the scene and later went to the hospital for additional, unspecified treatment and also had a cracked molar which led to a root canal (See Calif. Woman Sues Over Mannequin Attack).

I once walked upon one of my mannequins after a lady had gotten the pants completely off of the body without removing any of the parts of the mannequin. That was pretty impressive, but incredibly rude that she never once asked any employee of the store if they could assist her. She just went ahead and took the item she wanted. I wonder who she would have sued if the mannequin fell on

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