J.C. Penney discounts are going mobile as the department store takes aim at younger, tech-savvy shoppers.

Just in time for the crucial holiday shopping season, the company is testing a discount program from Cellfire that will allow Penney’s Houston-area shoppers to use their cell phones to download coupons that can be presented at checkout for savings.

The move comes as Penney gears up for the holiday shopping season — a crucial sales period for department stores and other retailers.

“It’s another way we’re innovating to enhance the customer’s shopping experience,” Mike Boylson, the company’s chief marketing officer said in a statement.

J.C. Penney’s test currently is limited to the Houston metro area. A promotion on Cellfire’s website reads: “Take $10 off a single purchase of $25 or more in store, jcp.com & catalog when you use your JCPenney card.”

Cellfire’s website also shows coupons for other area stores stores such as Sears and Kroger.

Shoppers who have downloaded Cellfire will have access to the same discounts that Penney sends via snail mail, and new offers will be available nearly every week. 

(Photo\Reuters)

Check out the quickly shifting media landscape putting retailers’ ad strategies at risk.

In a research note this week, Credit Suisse analyst Michael Exstein examined what changes in the media world mean for retailers who are used to reaching consumers through traditional channels — like the newspaper.

In the past five years, there has been a modest shift from print toward digital media, but Exstein warned that: ”We may in effect be reach a ‘tipping point’ where past media strategies will no longer be sustainable.”

Promotional national retailers that cater to a younger demographic and rely on national media to communicate to customers may be most exposed to changes in the media landscape, he said.

“This is a particularly acute problem for retailers that are used to (some would say dependent on) driving sales and marketshare through promotions such as Target, Kohl’s, Macy’s, and JCPenney,” he said.

“How will they promote in the future if the Sunday newspaper can not be counted on to distribute an insert or an television network can not be counted on to deliver an audience at a specific time/day?”

Retailers like Target that have a large number of younger shoppers — shoppers who rarely, if ever, read a newspaper and instead spend large amounts of time using Facebook or Twitter – there is less time to respond to the changing way consumers consume media, he said.

But retailers with older demographics – like Bon-Ton, Dillard’s, JCPenney or Macy’s – may have the advantage of at least being able to follow the lead of other retailers, who will need to move swiftly to respond to the shifting media landscape.

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(Photo: Reuters)

Check Out J.C. Penney’s new store in Manhattan.

On July 31, J.C. Penney will open its first Manhattan store in the midtown area, promising to deliver trendy yet affordable items for New York’s notoriously savvy shoppers.

Penney is taking direct aim at rival Macy’s, whose flagship Herald Square store is a block away.

In fact, the department store chain, which signed the lease for the space in December 2007 just as the U.S. slipped into recession, hopes the store will give its sales a much-needed boost and help it snag some of the city’s higher-income shoppers, just when they may need it most. 

“I think they will be glad to save some money too, don’t you, especially if they are bankers?” Penney District Manager Pete Sadler said during a walk-through of the store ahead of its opening later this month.

The store, located inside the Manhattan Mall at 34th Street, occupies a space that once included a food court.

The 153,000 square foot store is smaller than some other J.C. Penney stores and stocks merchandise ranging from women’s clothing and accessories to home goods. It has a Sephora makeup boutique, and fine jewelry store and will even deliver to people’s homes for a $15 charge.

Texas-based Penney is using the store opening to launch two exclusive brands — Joe by designer Joseph Abboud and Cindy Crawford Style home goods — as it tries to draw shoppers with the promise of affordable but special merchandise.

But even before the launch, the Joseph Abboud line was already on sale. Sadler was unsure why, but speculated that it could be in keeping with a storewide discount drive.

An opening event on July 31 will feature an appearance by Mayor Michael Bloomberg, fashion events and prize giveaways, Sadler said.

But for consumers who are not penny pinching that much, Nordstrom is planning to open its first Nordstrom Rack store in Manhattan’s Union Square next year.

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(Photos/Reuters)

Check out the generally dismal sales in June, sprinkled with drops of hope.

The rain that hampered play at last month’s U.S. Open golf championship also pressured the retail industry.

Sales dropped at several U.S. chains as consumers stayed out of the rain and out of the stores.  Still, some of those focused on discounts once again reaped the rewards as those who did go out searched for deals.

TJX, which runs chains such as T.J. Maxx, raised its earnings outlook after sales at stores open at least a year rose 4 percent.  Analysts on average had expected those sales to fall 0.6 percent.

Maybe things are starting to pick up even at chains where sales fell, as companies find ways to trim costs.  Target, which said same-store sales fell 6.2 percent still said earnings should come in at or above Wall Street’s expectations.  Over at J.C. Penney, same-store sales fell 8.2 percent, but that was better than the company’s forecast for a 9 percent to 12 percent drop. J.C. Penney also raised its second quarter guidance.

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(Reuters photo)

American luxury retail has been, well, in shambles.

Since department store revenues began to plummet in September, luxury’s glossy image transformed to one that brings to mind strewn-about merchandise on a Saks Fifth Avenue floor.

Pricing structures have come under pressure as shoppers seek deep discounts, or worse, question price guidelines after aggressive reductions at the end of last year.  In the spring, markdowns crept dangerously close to the start of the season.  Clearly, discounts really are not what designers want their labels to be known for.

“For younger, newer designers, image is everything,” said fashion consulting firm Launch Collective’s Rob Spira, who recently co-curated the New York City Save Fashion pop-up shop to celebrate independent designers.

“Before, designers were coming to us for ideas to build funding,” Spira told Reuters at the Save Fashion store, which popular style Web site Refinery29 also co-curated.  “Now they’re looking for creative ways to sustain in this kind of environment.”

Refinery29 Editorial Director Christene Barberich said many rising designers complained recently that upscale department stores were canceling orders despite interest in their brands.

“These smaller companies don’t really have the resources to sustain their $60,000 orders when stores cancel,” said Barberich.

Save Fashion, around for a one month stint in the city’s Port Authority bus terminal, allows designers grappling with lower profit margins and less marketing money to sell their overstock at half-off or more.  The bright space houses about eight fresh designers every week — including Helmut Lang, Steven Alan, ACNE, Earnest Sewn, Rachel Comey, and Rogan — in a way that won’t recall “a shabby sample sale,” Barberich said. Rather, she dubbed it a “dream capsule department store.”

Save Fashion’s ad campaign, depicting a model wrapped solely in an American flag, says a lot. The event indicates a shift in how Americans may define high-end products once the smoke clears.

“Most of the designers here aren’t considered ‘luxury,’ but there is something about them that shows a future of luxury: smaller quantities, more care, more attention,” Barberich said, adding that some of the brands make their own patterns and trademark their own textiles.  “Here, it’s not dirt cheap, but it’s as cheap as it can be where the designers are still making some money or at least falling flat instead of going into the red.”   

Refinery29 Founder Philippe von Borries talks about alternative retail from the Save Fashion store

Department stores are expected to see a bumpy road to recovery this year.  In March, Fitch Ratings Services said it sees same store sales for luxury department stores underperforming the broader sector, with double-digit sales declines continuing in the first half.  Standard & Poor’s cut five department store credit ratings in April, sending Macy’s and J.C. Penney to junk status, and Neiman Marcus into even riskier territory.  Saks received a speculative B-minus rating from both agencies due to weakening store sales.

Meanwhile, the Dubai investment firm that owns Barneys New York gave the high-end store a capital injection last month to help it pay for its remaining shipments, one day after S&P cut Barneys to a deeply distressed ratings level.

“The nature of retail is changing,” Launch Collective’s Spira said.  “Despite the fact that we’re in challenging times, to the consumer it has to seem like everything is still beautiful.”

(Reuters photo)

Check out some strong sales.

Sure, sales are still down at most chains.  Still, anything that’s down less than expected is a good sign in this economy, right?

Sales at Wal-Mart’s U.S. stores open at least a year jumped 5 percent, topping analysts’ average expectation for a 2.9 percent rise.  And in a sign that improving sales are leading to better profitability, retailers including J.C. Penney, TJX and Kohl’s raised their profit expectations for their just-completed first quarter.

Also, it looks like kids whose parents didn’t have the money for family vacations over spring break spent some of their time in shopping malls.  Some of the biggest surprises came from Aeropostale and The Buckle, which cater to teens.  Both posted double-digit gains in same-store sales.

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(Reuters photo)

Wal-Mart flexed its retail muscle on Black Friday to the delight of deal-seeking shoppers who spoke with our reporter Nicole Maestri in Columbia, Maryland.

Early bird buyers with shopping carts stuffed with toys, electronics and clothes stood 10 deep in checkout lines and the parking lot was packed with cars at 7:30 in the morning. In Valley Stream, Long Island, the crush turned tragic when a temp worker was killed by the crowd surging through a Wal-Mart’s doors.

The Friday after Thanksgiving, known as Black Friday, kicks off the Christmas shopping season and marks what is traditionally the busiest retail day of the year. But what began to emerge from shoppers’ stories was that even if they were willing to look for deals elsewhere, they kept coming back to Wal-Mart.

Marathon shoppers April Richards, 26, and her mom, Diana Eichhorn, 49, started their holiday gift hunt at the Thanksgiving Day sale at Kmart, which was out of the pajamas they hoped to buy. From there they went to Arundel Mills, that features outlet and discount stores, at midnight. They also stopped by Kohl’s at 4 a.m.

But at Wal-Mart they found deals on everything from a sewing machine to $8 jeans and $4 pajamas. The duo said the store’s discounts were so good that they bought jeans and other items that they normally would have purchased elsewhere.

Wal-mart is expected to be one of the few companies to prosper this holiday shopping season, which is feared to be the weakest since the early 1990s as a credit freeze and home price implosion hit consumers’ wallets.

In Oakland, California, shoppers who lined up in the darkness to be first to get their hands on deals when the store opened at 5 a.m. sprinted for the electronics and computer departments.

Back in Maryland, Adel Beshai, 42, said he arrived at a Wal-Mart at 6:30 in the morning knowing that he could get a low price on a flat-screen television. He walked out with a 50-inch Samsung for a little less than $900.

Beshai, who lost his carpentry job about a year ago and now drives a taxi, said he is not trimming his holiday budget. He still plans to take his four children to the stores to pick out what they want for gifts.

“It’s our life,” Beshai said. “We cannot die because the economy is down.”

The scene was more subdued across the street at Target, where the registers were not as busy ringing up sales and few lines had more than two people waiting.

Still, the store’s electronics department was busy.

In the Target parking lot, Alice Hughes, 45, said her purchases included an $89 digital camera.

Hughes said she was expecting to see more people at Target. “They need more people to be out so they will probably lower prices,” she said.

Hughes, a senior contracts administrator for the government, said she and her 25-year-old daughter had already been to Sears, Macy’s and JCPenney.

A treadmill deal at Sears lured Hughes out on Black Friday, when she usually stays home.

In addition to buying the treadmill at Sears, Hughes bought a 32-inch flat screen TV.
At JCPenney, she bought a $60 coat for herself and a $30 leather coat for her daughter.

Still, Hughes said she was not overly impressed with the prices.

“I think they’re playing. They tell you they’re marking down but they’re really not,” said Hughes, who expects prices to fall further as Christmas approaches.

Jamal Bullock, 30, has already learned that lesson.

In the Target parking lot after buying a stand for his new television, Bullock said he was headed to Best Buy later in the afternoon to get a refund after the flat-screen TV he bought last week for $1,499. Its price has already fallen to $1,299.

(Photos\Reuters)