WEBVTT - JCPenney CEO Marc Rosen Talks Retail Outlook

0:00:00.080 --> 0:00:02.040
<v Speaker 1>All right, let's turn back to retail now in the

0:00:02.080 --> 0:00:05.280
<v Speaker 1>State of the consumer, let's talk about JC Penny. Of course,

0:00:05.320 --> 0:00:08.760
<v Speaker 1>the retailer is unveiling a new pricing strategy that aims

0:00:08.800 --> 0:00:11.920
<v Speaker 1>to ensure that no budget is too small. Joining us

0:00:11.960 --> 0:00:14.200
<v Speaker 1>now with more on the state of the US consumer

0:00:14.240 --> 0:00:17.079
<v Speaker 1>is jcpenny CEO, Mark Rosenmark. It's great to have you

0:00:17.160 --> 0:00:19.320
<v Speaker 1>back with us, and let's talk about that. We were

0:00:19.320 --> 0:00:22.040
<v Speaker 1>just having a conversation with Caterina Seminetti, of course, about

0:00:22.239 --> 0:00:26.520
<v Speaker 1>who needs rate cuts in this economy, and the answer increasingly,

0:00:26.560 --> 0:00:29.320
<v Speaker 1>of course, is that middle class consumer. It's that lower

0:00:29.320 --> 0:00:32.160
<v Speaker 1>tier consumer. And with that in mind, what do your

0:00:32.240 --> 0:00:36.040
<v Speaker 1>promotionals on your sales look like heading into the holiday season.

0:00:37.680 --> 0:00:39.879
<v Speaker 2>Well, that's right, I mean, I think as you look

0:00:39.920 --> 0:00:43.320
<v Speaker 2>at the economy right now, certainly the consumer is pressed

0:00:43.320 --> 0:00:44.200
<v Speaker 2>a bit right now.

0:00:44.640 --> 0:00:45.639
<v Speaker 3>And we do.

0:00:45.680 --> 0:00:48.920
<v Speaker 2>Say that our customer, which is really America's diverse working families,

0:00:48.960 --> 0:00:53.639
<v Speaker 2>it's that middle class consumer. It's that working family. It's

0:00:53.760 --> 0:00:56.800
<v Speaker 2>the teachers that teach our kids, it's the medical workers

0:00:56.800 --> 0:00:58.360
<v Speaker 2>that take care of us and our family, and the

0:00:58.400 --> 0:01:01.400
<v Speaker 2>construction workers that build our home, and they are stretched

0:01:01.440 --> 0:01:03.720
<v Speaker 2>right now. But we're actually really encouraged with what we've

0:01:03.760 --> 0:01:07.399
<v Speaker 2>seen really since back to school, so we saw a

0:01:07.440 --> 0:01:11.080
<v Speaker 2>step change improvement in traffic and sales and back to school.

0:01:11.440 --> 0:01:13.200
<v Speaker 2>And then I know you were just rolling the tape

0:01:13.240 --> 0:01:16.800
<v Speaker 2>from our really big deals which air every Thursday night

0:01:16.959 --> 0:01:20.240
<v Speaker 2>on Thursday Night Football, and we've been really encouraged with

0:01:20.280 --> 0:01:22.240
<v Speaker 2>what we're seeing with that too. In fact, we've now

0:01:22.280 --> 0:01:24.800
<v Speaker 2>seen where we expect that during the holiday we're going

0:01:24.840 --> 0:01:27.800
<v Speaker 2>to have from that Thursday Night Football over two million

0:01:27.880 --> 0:01:30.759
<v Speaker 2>new customers who are in our file by that time.

0:01:31.120 --> 0:01:33.480
<v Speaker 2>And so the customer is looking for value, but they're

0:01:33.480 --> 0:01:35.840
<v Speaker 2>also looking for joy, and they're going to celebrate and

0:01:35.880 --> 0:01:37.920
<v Speaker 2>they're going to have holiday and we're confident.

0:01:37.520 --> 0:01:40.559
<v Speaker 1>About that right. And of course October eighteenth ession Ali

0:01:40.680 --> 0:01:44.280
<v Speaker 1>was pointing out we're already in a Christmas decorating season here.

0:01:44.480 --> 0:01:46.440
<v Speaker 1>But I am curious. I mean, when you think about

0:01:46.520 --> 0:01:48.720
<v Speaker 1>JC Penny, of course, you've been around for a long

0:01:48.840 --> 0:01:51.960
<v Speaker 1>long time. You're an iconic brand that has fallen on

0:01:52.040 --> 0:01:55.440
<v Speaker 1>some hard times. How do you balance of course promotions,

0:01:55.440 --> 0:01:59.440
<v Speaker 1>putting through discounts while still trying to build brand relevancy

0:01:59.440 --> 0:02:02.040
<v Speaker 1>and brand I have to imagine that's a difficult needle.

0:02:02.080 --> 0:02:03.920
<v Speaker 1>To thread right.

0:02:04.000 --> 0:02:05.840
<v Speaker 2>So, as you mentioned, right, jac Penny has been around

0:02:05.840 --> 0:02:08.200
<v Speaker 2>for over one hundred and twenty years, and throughout that

0:02:08.400 --> 0:02:12.000
<v Speaker 2>time we've always stood for value to the consumer, and

0:02:12.080 --> 0:02:15.640
<v Speaker 2>so values are really important part of our proposition. But

0:02:15.760 --> 0:02:18.919
<v Speaker 2>value is about more than just promotion and price. Value

0:02:18.960 --> 0:02:21.760
<v Speaker 2>is about being able to find the fashion statements that

0:02:21.800 --> 0:02:25.640
<v Speaker 2>you want. So for holiday, we're introducing I think one

0:02:25.680 --> 0:02:28.080
<v Speaker 2>of my favorite items is a bear pob blanket. Right,

0:02:28.120 --> 0:02:30.840
<v Speaker 2>really comfy, really great item. It's going to be in

0:02:30.880 --> 0:02:33.480
<v Speaker 2>our stores. It's at a great price and you can

0:02:33.520 --> 0:02:36.280
<v Speaker 2>find that for holiday. I think you know, when we

0:02:36.320 --> 0:02:40.600
<v Speaker 2>talk about value, also, it's not just meaning low price.

0:02:40.680 --> 0:02:42.920
<v Speaker 2>So one of the biggest items for women this holiday

0:02:42.919 --> 0:02:45.399
<v Speaker 2>we're expecting to be diamonds, and we have a great

0:02:45.480 --> 0:02:48.440
<v Speaker 2>jewelry department that sells those diamonds at a great price

0:02:48.480 --> 0:02:50.880
<v Speaker 2>and a great value for what you're getting. But the

0:02:50.919 --> 0:02:55.080
<v Speaker 2>consumers interested in buying those items. So for us, really

0:02:55.480 --> 0:02:59.400
<v Speaker 2>the brand value proposition is about accessible fashion. It's about

0:02:59.440 --> 0:03:02.160
<v Speaker 2>finding great eight value, which is quality and brands at

0:03:02.200 --> 0:03:04.720
<v Speaker 2>a really outstanding price, and it's about a great shopping

0:03:04.760 --> 0:03:06.800
<v Speaker 2>experience and then that combination that's.

0:03:06.639 --> 0:03:09.280
<v Speaker 4>Going to win. It's interesting you're clearly making a lot

0:03:09.320 --> 0:03:13.679
<v Speaker 4>of inventory choices at this moment based on changing consumer preferences.

0:03:13.960 --> 0:03:16.560
<v Speaker 4>I'm wondering, Mark in the other direction, are there things

0:03:16.560 --> 0:03:18.280
<v Speaker 4>that you seem to be buying a lot less of

0:03:18.880 --> 0:03:21.639
<v Speaker 4>these days, given where consumer preferences are headed.

0:03:23.040 --> 0:03:25.240
<v Speaker 2>Yeah, I think as we as we look at holiday,

0:03:25.240 --> 0:03:27.320
<v Speaker 2>we're really focused on what we're buying and making sure

0:03:27.320 --> 0:03:28.920
<v Speaker 2>that we have the right inventory and a lot of

0:03:28.919 --> 0:03:31.640
<v Speaker 2>our aur We announced about a year ago a billion

0:03:31.720 --> 0:03:34.560
<v Speaker 2>dollar self funded reinvestment in the business. A big part

0:03:34.600 --> 0:03:37.360
<v Speaker 2>of that was in inventory tools and making sure that

0:03:37.360 --> 0:03:39.680
<v Speaker 2>we're getting the right items in the right place for

0:03:39.800 --> 0:03:43.240
<v Speaker 2>the customer. So we're certainly focused on some of the

0:03:43.240 --> 0:03:44.960
<v Speaker 2>big items that we know we're going to have. Our

0:03:45.000 --> 0:03:47.720
<v Speaker 2>Saint John's Bay cable knit sweater is always always a

0:03:47.760 --> 0:03:50.640
<v Speaker 2>best seller, but we are also focused on what are

0:03:50.640 --> 0:03:52.600
<v Speaker 2>some of the items that are not selling as well,

0:03:52.640 --> 0:03:54.440
<v Speaker 2>and how do we make sure we can invest that

0:03:54.520 --> 0:03:57.400
<v Speaker 2>inventory in the things that are going to drive sales growth.

0:03:57.440 --> 0:04:01.240
<v Speaker 3>What is the main cohort you're going after. I mean,

0:04:02.400 --> 0:04:04.800
<v Speaker 3>it's been said middle class. Certainly that was the case

0:04:04.840 --> 0:04:06.480
<v Speaker 3>when I was a kid in Central Ohio, but that

0:04:06.560 --> 0:04:09.280
<v Speaker 3>was a long time ago. Who is your customer and

0:04:09.320 --> 0:04:10.960
<v Speaker 3>how is that customer doing right now?

0:04:12.080 --> 0:04:14.280
<v Speaker 2>Yeah, our customer, we say, our customer is really the

0:04:14.280 --> 0:04:17.640
<v Speaker 2>core of America. It is America's diverse working families. So,

0:04:17.680 --> 0:04:20.880
<v Speaker 2>as I said earlier, it really is the teachers that

0:04:20.920 --> 0:04:23.800
<v Speaker 2>are teaching our kids, it's construction workers that are building

0:04:23.839 --> 0:04:26.800
<v Speaker 2>our homes and offices, it's the medical workers taking care

0:04:26.839 --> 0:04:29.719
<v Speaker 2>of us and our families. And it is that core

0:04:29.800 --> 0:04:34.000
<v Speaker 2>of America household that we're serving with all the things

0:04:34.000 --> 0:04:37.279
<v Speaker 2>that they can do. So whether that's towels for their home,

0:04:37.279 --> 0:04:42.440
<v Speaker 2>whether that's sheets, whether that is clothing, or whether that's

0:04:42.480 --> 0:04:45.200
<v Speaker 2>holiday gifts. And we're really excited this year we've expanded

0:04:45.200 --> 0:04:48.560
<v Speaker 2>our holiday gifts selection. But it's everything to serve the

0:04:48.640 --> 0:04:49.799
<v Speaker 2>needs of that family.

0:04:50.160 --> 0:04:51.400
<v Speaker 3>What about your workers?

0:04:51.680 --> 0:04:52.680
<v Speaker 2>Who is working for you?

0:04:52.760 --> 0:04:56.880
<v Speaker 3>And how difficult or easy is it for you to

0:04:56.920 --> 0:05:00.919
<v Speaker 3>find employees to fully staff a store, Because frankly, for me,

0:05:01.000 --> 0:05:03.960
<v Speaker 3>at least, the retail experience, not jcpenny, you know, but

0:05:04.240 --> 0:05:07.600
<v Speaker 3>most stores has been really disappointing the last few years.

0:05:07.600 --> 0:05:10.320
<v Speaker 3>It doesn't seem like there are enough people working there.

0:05:10.360 --> 0:05:12.400
<v Speaker 3>They don't seem to be really happy with their job,

0:05:12.480 --> 0:05:14.560
<v Speaker 3>they're not super helpful, to customers, So how are you

0:05:14.600 --> 0:05:15.159
<v Speaker 3>dealing with that?

0:05:16.640 --> 0:05:16.800
<v Speaker 4>Right?

0:05:16.880 --> 0:05:19.559
<v Speaker 2>So, I think for us, one of the interesting things

0:05:19.720 --> 0:05:23.160
<v Speaker 2>is our employees, and when we centered ourselves around our

0:05:23.160 --> 0:05:27.320
<v Speaker 2>purpose of serving America's diverse working families, that's really our employee. Also,

0:05:27.440 --> 0:05:32.080
<v Speaker 2>our employee mirrors our customer. And so we have operated

0:05:32.120 --> 0:05:34.160
<v Speaker 2>for over one hundred and twenty years on the golden rule,

0:05:34.200 --> 0:05:37.200
<v Speaker 2>which is letting others have the experience and treating others

0:05:37.279 --> 0:05:38.880
<v Speaker 2>the way that we want to be treated, and that's

0:05:38.880 --> 0:05:41.640
<v Speaker 2>the guideline of our customer service and stores. We've been

0:05:41.760 --> 0:05:44.520
<v Speaker 2>encouraged with staffing for this holiday and really over the

0:05:44.640 --> 0:05:47.320
<v Speaker 2>last probably twelve plus months as we look at the

0:05:47.400 --> 0:05:49.720
<v Speaker 2>labor market that both in our stores and our distribution

0:05:49.839 --> 0:05:52.320
<v Speaker 2>centers we've been able to hire. We also have a

0:05:52.320 --> 0:05:56.159
<v Speaker 2>lot of long tenured associates in our stores, and we're

0:05:56.160 --> 0:05:58.920
<v Speaker 2>really focused on net promoter scoring. We've seen a big

0:05:58.960 --> 0:06:02.080
<v Speaker 2>increase in net promoter score as we've remodeled our stores

0:06:02.360 --> 0:06:05.359
<v Speaker 2>and as we've really focused on the service initiative within stores.

0:06:05.880 --> 0:06:09.080
<v Speaker 1>And I'm taking a look at some recent headlines. In September,

0:06:09.080 --> 0:06:10.760
<v Speaker 1>the news came out that you planned to hire more

0:06:10.800 --> 0:06:14.520
<v Speaker 1>than ten thousand seasonal workers for this upcoming holiday season.

0:06:14.760 --> 0:06:17.320
<v Speaker 1>How does that compare to years past, Mark.

0:06:19.240 --> 0:06:22.479
<v Speaker 2>It's really a similar trend to years past, so not

0:06:22.560 --> 0:06:25.400
<v Speaker 2>a big difference this year. I think we're expecting a

0:06:25.440 --> 0:06:28.359
<v Speaker 2>strong holiday season, and we're staffing up for that holiday season,

0:06:28.400 --> 0:06:29.680
<v Speaker 2>and we're hiring accordingly.

0:06:30.240 --> 0:06:32.920
<v Speaker 1>All Right, Mark, really appreciate the update. Have a great

0:06:32.920 --> 0:06:35.200
<v Speaker 1>weekend when you get there. That is JC Penny CEO

0:06:35.600 --> 0:06:36.159
<v Speaker 1>Mark Rosen