1 00:00:00,000 --> 00:00:02,320 Speaker 1: Please just say. Joining us right now is Mark Rosen. 2 00:00:02,520 --> 00:00:05,280 Speaker 1: He's the CEO of JC Penny. Joining us, of course, 3 00:00:05,320 --> 00:00:07,720 Speaker 1: at a very apt time where the holiday shopping season 4 00:00:07,800 --> 00:00:09,920 Speaker 1: is scheduled to kick off, and a lot of folks 5 00:00:09,960 --> 00:00:12,840 Speaker 1: right now really focus in on consumer trends, what we're buying, 6 00:00:12,880 --> 00:00:15,720 Speaker 1: and more importantly, how much we're going to buy. Mark, 7 00:00:15,760 --> 00:00:18,160 Speaker 1: I do want to dive into what's going on specifically 8 00:00:18,160 --> 00:00:20,360 Speaker 1: with JC Penny, but before we get there, I do 9 00:00:20,520 --> 00:00:22,639 Speaker 1: want to just get your broader thoughts here about consumer 10 00:00:22,720 --> 00:00:24,800 Speaker 1: spending and whether you think we are going to see 11 00:00:24,800 --> 00:00:27,040 Speaker 1: a holiday shopping season that is at least kind of 12 00:00:27,040 --> 00:00:29,240 Speaker 1: commensurate with what we've had in previous years. 13 00:00:30,400 --> 00:00:32,720 Speaker 2: Yeah. I think we absolutely will see a holiday that 14 00:00:32,880 --> 00:00:35,640 Speaker 2: is commensurate with that. You know, what we're seeing is 15 00:00:35,640 --> 00:00:38,239 Speaker 2: half of consumers are actually saying they are going to 16 00:00:38,240 --> 00:00:39,919 Speaker 2: spend more this year. I think what you are going 17 00:00:39,960 --> 00:00:42,800 Speaker 2: to see is that consumers are much more focused on 18 00:00:43,000 --> 00:00:45,280 Speaker 2: value than they've ever been before, and we're seeing that 19 00:00:45,360 --> 00:00:46,920 Speaker 2: in shopping behavior this year. 20 00:00:47,360 --> 00:00:50,680 Speaker 1: We've had some earnings reports from folks like Burlington and TJX, 21 00:00:50,720 --> 00:00:53,519 Speaker 1: which seems to show that trend certainly in place. A 22 00:00:53,520 --> 00:00:55,319 Speaker 1: lot of folks trading down, and it's not just low 23 00:00:55,360 --> 00:00:59,160 Speaker 1: income consumers. We even't have higher income consumers also trading 24 00:00:59,160 --> 00:01:02,680 Speaker 1: down as well. Wondering whether that you've actually seen that 25 00:01:02,800 --> 00:01:05,080 Speaker 1: in your stores as well. 26 00:01:05,200 --> 00:01:07,080 Speaker 2: Yeah, so I think let's say if we step back 27 00:01:07,080 --> 00:01:09,399 Speaker 2: for a minute and just talk about our consumer. The 28 00:01:09,440 --> 00:01:12,640 Speaker 2: consumer in our store is you know, we say our 29 00:01:12,640 --> 00:01:16,040 Speaker 2: customers America's diverse working families. It's a seventy five thousand 30 00:01:16,040 --> 00:01:19,720 Speaker 2: dollars median household income. So if you think of our customer, 31 00:01:19,840 --> 00:01:22,480 Speaker 2: it's the teachers who are teaching our children, it's the 32 00:01:22,720 --> 00:01:26,479 Speaker 2: medical workers who are taking care of us and our families. 33 00:01:27,000 --> 00:01:31,560 Speaker 2: And for that consumer inflation has definitely definitely been a challenge, 34 00:01:31,600 --> 00:01:34,199 Speaker 2: and so what we're seeing is the consumer is looking 35 00:01:34,240 --> 00:01:37,319 Speaker 2: more for value. The consumer is more focused on price. 36 00:01:37,440 --> 00:01:41,400 Speaker 2: We're seeing more responsiveness to when we're offering promotions and 37 00:01:42,000 --> 00:01:45,720 Speaker 2: things like that. And you know, we've been really successful 38 00:01:45,760 --> 00:01:49,480 Speaker 2: by doing what we're saying we're doing, which is taking 39 00:01:50,280 --> 00:01:52,960 Speaker 2: inflation out of the holiday for our customers. We've gone 40 00:01:53,000 --> 00:01:56,000 Speaker 2: back and taken hundreds of items that we had last 41 00:01:56,080 --> 00:01:58,480 Speaker 2: year and we're offering the same price as last year 42 00:01:58,640 --> 00:02:01,360 Speaker 2: or lower, and we have thousands of gift items that 43 00:02:01,400 --> 00:02:03,560 Speaker 2: are under fifteen dollars for our customer. 44 00:02:03,720 --> 00:02:06,000 Speaker 1: I'm curious as to how you're pricing this when you 45 00:02:06,040 --> 00:02:09,320 Speaker 1: say at those low prices, are those basically I guess 46 00:02:09,400 --> 00:02:11,880 Speaker 1: the full retail price if you will, meaning that low price, 47 00:02:12,200 --> 00:02:14,120 Speaker 1: or is that price is that the price you get 48 00:02:14,160 --> 00:02:16,880 Speaker 1: to after taking into account a discount or coupon? 49 00:02:18,040 --> 00:02:21,200 Speaker 2: So I'm talking about the Black Friday price, and so 50 00:02:21,560 --> 00:02:24,600 Speaker 2: our Black Friday prices are the lowest prices that we offer. 51 00:02:25,560 --> 00:02:28,080 Speaker 1: How are you going to get people, I guess to buy. 52 00:02:28,240 --> 00:02:31,799 Speaker 1: Is this about getting them physically into your store locations 53 00:02:32,080 --> 00:02:33,639 Speaker 1: or is this going to be much more of an 54 00:02:33,680 --> 00:02:35,880 Speaker 1: online e commerce strategy. 55 00:02:36,840 --> 00:02:38,200 Speaker 2: I think it's going to be a bit of both, 56 00:02:38,280 --> 00:02:41,280 Speaker 2: and we've seen success across both online and in store. 57 00:02:41,440 --> 00:02:44,280 Speaker 2: We launched our Black Friday early, We launched November third 58 00:02:44,360 --> 00:02:47,400 Speaker 2: through fifth, and we saw great success. We saw a 59 00:02:47,440 --> 00:02:50,400 Speaker 2: big increase in our store traffic, and we also saw 60 00:02:50,960 --> 00:02:54,600 Speaker 2: really strong buying online. If you think about the event 61 00:02:54,639 --> 00:02:57,799 Speaker 2: that we're going into tomorrow, Thanksgiving Day will be an 62 00:02:57,840 --> 00:03:01,480 Speaker 2: online day and day Black Friday morning is going to 63 00:03:01,520 --> 00:03:03,680 Speaker 2: be an in store day, and to really encourage that 64 00:03:03,800 --> 00:03:06,880 Speaker 2: in store experience on Black Friday morning, we're going to 65 00:03:06,960 --> 00:03:09,919 Speaker 2: have events going throughout the day. So we have events 66 00:03:09,919 --> 00:03:13,160 Speaker 2: starting at five am, again at nine am, one pm, 67 00:03:13,360 --> 00:03:15,640 Speaker 2: and five pm. And just to give you a couple 68 00:03:15,760 --> 00:03:19,160 Speaker 2: examples of what we're going to be doing, some customers 69 00:03:19,200 --> 00:03:21,440 Speaker 2: will actually get five hundred dollars off of five hundred 70 00:03:21,440 --> 00:03:23,640 Speaker 2: dollars purchase. In other words, we'll pay for their entire 71 00:03:23,720 --> 00:03:27,359 Speaker 2: purchase and that will be by a bus stamp pack 72 00:03:27,440 --> 00:03:29,000 Speaker 2: that they receive when they come into our store that 73 00:03:29,000 --> 00:03:31,600 Speaker 2: we'll have coupon's in it. And at one o'clock we're 74 00:03:31,600 --> 00:03:34,560 Speaker 2: going to be giving away diamonds. There's a diamond pendant 75 00:03:34,639 --> 00:03:37,120 Speaker 2: necklace in each one of our stores in thirty thousand 76 00:03:37,120 --> 00:03:39,840 Speaker 2: diamonds spread across our stores. So that's going to keep 77 00:03:39,840 --> 00:03:41,880 Speaker 2: the excitement going in store throughout the day. 78 00:03:42,120 --> 00:03:44,000 Speaker 1: We have to talk a little bit about the turnaround 79 00:03:44,080 --> 00:03:47,320 Speaker 1: going on, of course, So jcpenny went into bankruptcy protection 80 00:03:48,480 --> 00:03:50,760 Speaker 1: a few years ago. You were brought in shortly after 81 00:03:50,800 --> 00:03:53,680 Speaker 1: that once assignment property and Brookfield I took it over. 82 00:03:53,920 --> 00:03:56,040 Speaker 1: I am curious as to how things have gone since 83 00:03:56,080 --> 00:03:58,280 Speaker 1: the only I know you're not required to disclose your 84 00:03:58,360 --> 00:04:01,600 Speaker 1: numbers publicly, but David Simon has been on the record 85 00:04:01,640 --> 00:04:05,520 Speaker 1: saying I think his exact words is something like unbelievably profitable. 86 00:04:06,080 --> 00:04:08,520 Speaker 1: Is how things are going here? Can you quantify that 87 00:04:08,600 --> 00:04:09,200 Speaker 1: for us at all? 88 00:04:10,280 --> 00:04:12,920 Speaker 2: Yeah? Well, like you said, right, we are private and 89 00:04:13,000 --> 00:04:16,280 Speaker 2: so we don't release our earning s quarterly and we 90 00:04:16,720 --> 00:04:18,400 Speaker 2: don't share that information. But what I can tell you 91 00:04:18,520 --> 00:04:20,880 Speaker 2: is this, what we're really focused on is the customer 92 00:04:20,920 --> 00:04:23,520 Speaker 2: and bringing the customer back to shop at jcpenny and 93 00:04:23,600 --> 00:04:27,320 Speaker 2: letting them really understand all the things that they can get. 94 00:04:27,560 --> 00:04:32,080 Speaker 2: And so we launched in September, we launched a billion 95 00:04:32,120 --> 00:04:37,080 Speaker 2: dollar reinvestment in the brand, really remodeling our stores, we 96 00:04:37,320 --> 00:04:40,640 Speaker 2: relaunched our website, We're improving our supply chain, and we 97 00:04:40,720 --> 00:04:44,280 Speaker 2: launched an advertising campaign called make It Count that's really 98 00:04:44,360 --> 00:04:47,080 Speaker 2: letting our customers understand how jcpenny can bring them that 99 00:04:47,160 --> 00:04:49,960 Speaker 2: great value and get them a shopping experience where they 100 00:04:49,960 --> 00:04:51,800 Speaker 2: don't have to make the trade offs they can't they 101 00:04:51,839 --> 00:04:53,479 Speaker 2: have to make in their everyday life. 102 00:04:53,600 --> 00:04:55,440 Speaker 1: Well, I am curious. I mean I've seen that ad 103 00:04:55,480 --> 00:04:57,320 Speaker 1: and I've seen some of the collaborations that you have, 104 00:04:57,440 --> 00:05:01,120 Speaker 1: including the line of clothes kind of based of Abvid Elementary, 105 00:05:01,360 --> 00:05:04,040 Speaker 1: the fictional and television show. And I mean, just giving 106 00:05:04,120 --> 00:05:06,440 Speaker 1: your background at other retailers, probably you got there. I mean, 107 00:05:06,480 --> 00:05:08,920 Speaker 1: I'm sure you have to know that getting folks back 108 00:05:09,120 --> 00:05:11,720 Speaker 1: to a brand, to a store brand isn't always just 109 00:05:11,760 --> 00:05:14,480 Speaker 1: about value. It's also about the cachet, and it's about 110 00:05:14,760 --> 00:05:17,279 Speaker 1: the ethos, and it's about just kind of people feeling 111 00:05:17,279 --> 00:05:20,480 Speaker 1: a connection. Here, JZ Penny Loss said, I mean, I 112 00:05:20,520 --> 00:05:22,200 Speaker 1: think we're going to just say that flat out here, 113 00:05:22,520 --> 00:05:23,720 Speaker 1: how is it getting it back? 114 00:05:25,400 --> 00:05:28,120 Speaker 2: I agree with you. It's all about bringing back relevance 115 00:05:28,279 --> 00:05:31,680 Speaker 2: to the consumer. And you mention some of the collaborations 116 00:05:31,680 --> 00:05:33,400 Speaker 2: that we're doing, and I talked about our customer and 117 00:05:33,440 --> 00:05:35,720 Speaker 2: I said, our customer was the teacher who's teaching our kids. 118 00:05:35,760 --> 00:05:40,520 Speaker 2: Abvid Elementary is spot on for that. We just launched 119 00:05:40,520 --> 00:05:44,760 Speaker 2: a new line of cookware called Mesa Mia with Jenny Martinez. 120 00:05:45,000 --> 00:05:47,400 Speaker 2: We've had huge success. It's now one of our biggest 121 00:05:47,440 --> 00:05:50,280 Speaker 2: cookware brands. So it is about having the brands and 122 00:05:50,320 --> 00:05:52,800 Speaker 2: the products and the things that are relevant to our 123 00:05:52,839 --> 00:05:55,200 Speaker 2: consumer to bring them back into the store. And you 124 00:05:55,200 --> 00:05:57,280 Speaker 2: asked about the transformation and how it's going and some 125 00:05:57,400 --> 00:06:00,240 Speaker 2: proof points, and what we've seen is where as there 126 00:06:00,360 --> 00:06:03,880 Speaker 2: was a decline in frequency of our customers visiting us 127 00:06:03,880 --> 00:06:07,960 Speaker 2: for many years. We've now seen that turn over the 128 00:06:08,040 --> 00:06:11,200 Speaker 2: last year and we're now seeing an increase in customer frequency. 129 00:06:11,480 --> 00:06:15,200 Speaker 2: We're seeing an increase in organic search for our brand. 130 00:06:15,240 --> 00:06:17,640 Speaker 2: We're seeing an increase in Google search, and people are 131 00:06:18,000 --> 00:06:22,640 Speaker 2: realizing that J. C. Penny is some a brand that 132 00:06:22,680 --> 00:06:27,360 Speaker 2: can bring them the amazing products like Saint John's flannel 133 00:06:27,400 --> 00:06:29,760 Speaker 2: shirts that we have for eleven ninety nine for holiday, 134 00:06:30,080 --> 00:06:32,719 Speaker 2: like our Liz Claiborne brand, like Cooks in Home that 135 00:06:32,800 --> 00:06:36,880 Speaker 2: has an incredible value for customers. We're offering fourteen ninety 136 00:06:36,960 --> 00:06:40,920 Speaker 2: nine blenders and a lot of small appliances for Black Friday. 137 00:06:41,320 --> 00:06:44,080 Speaker 2: And when they that and put that together, they realize 138 00:06:44,080 --> 00:06:45,080 Speaker 2: that it is a place. 139 00:06:44,880 --> 00:06:47,920 Speaker 1: For them, all right. Mark, great to talk to Mark Rosen. 140 00:06:47,960 --> 00:06:51,040 Speaker 1: He's a CEO over there at jcpenny, heading into very 141 00:06:51,080 --> 00:06:53,520 Speaker 1: pivotal holiday shopping season.