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NEW YORK – This holiday season, J.C. Penney CEO and Chairman Myron E. Ullman III is armed with a lineup of exclusive fashion brands he helped bring to the department store chain, and he’s ready to battle key rivals such as Macy’s.
During more than two decades in retailing, Ullman has seen a slew of competitors go out of business and – as Macy’s CEO in the early 1990s – even succumbed to a hostile takeover bid, from Federated Department Stores.
But he says nothing presented the kinds of challenges that Penney and other stores face now. He believes this recession has permanently made consumers more frugal.
Always an optimist, he says this plays to Penney’s strength, however, because the moderate-price chain offers a stylish alternative to higher-price rivals. Under his stewardship since December 2004, Penney has moved from offering mainly store brands to filling its floors with trendy Sephora cosmetics shops and affordable lines from designers like Nicole Miller.
This fall saw the arrival of “Cindy Crawford Style,” a home furnishing and accessories collection exclusive to Penney, and JOE Joseph Abboud, an exclusive collection of men’s sportswear and tailored clothing. And the company announced it will be the sole U.S. store selling all the Liz Claiborne lines, except for the Isaac Mizrahi-designed Liz Claiborne New York brand, which goes to QVC next fall.
As many other retailers have closed stores or laid off workers in response to the downturn, Penney has kept investing, most notably in July opening its first Manhattan store.
Ullman, the eldest of seven children, says his father, Myron E. Ullman II – an industrial engineer who invented a modern version of the dishwasher in the late 1950s – taught him to innovate. They even built the family house together in northern Ohio.
A neuromuscular condition that requires Ullman, 62, to get around by scooter hasn’t slowed him. He says he’s devoted to his wife, Cathy, their four sons and two daughters, and he’s done charity work for years.
Here are some excerpts from an interview with Ullman at the new store in Manhattan’s Herald Square.
Q. What has it been like to navigate the biggest consumer spending downturn in decades?
A. It is an especially important time to be clear in our communications, in how we are going to focus our efforts. We made a conscious decision to moderate some of our behavior: expenses, capital, inventories. We wanted to maintain our focus on some of our key principles like our key brands. And we actually wanted to accelerate our investments in some categories, like Sephora and customer service, rather just saying it’s going to be a tough economy and everything is going to change.
Q. How have your consumers’ habits changed?
A. We are dealing with a middle-income consumer (who) has been the one with the most changes in terms of discretionary behavior. The bottom quartile is very focused on the daily needs. The top quartile has resources and is not concerned about the day-to-day things.
There is this new normal. People are going to be very pragmatic. That plays to our strengths, and it just encourages us to be sharper on prices.
Q. How prepared do you feel about the holiday shopping season?
A. A year ago, we had way too much inventory so our primary issue was how we were going to get rid of this stuff. This year, we have our inventory invested in key categories. We are much better positioned to take care of the customer on the things that we think they are going to want for Christmas.
We are encouraged by the fashion they were buying (in October). Wool coats sold very well, and women’s apparel is the leading category.
