JC Penney Launches New Brand After Two Months of Declining Sales

In the midst of a significant slowdown in consumer spending, JC Penny is not going out without a fight. The 105-year-old company has given the green light for its biggest merchandise launch in the company’s history in an effort to capture greater market share in a tense retail atmosphere.

The American Living launch is supported by JC Penney’s largest ever media campaign. The company will be the official retail sponsor for the Academy Awards with new ads being introducing during the live television broadcast. In addition, Penney will run American Living ads on Spanish-language television network, Univision. It will also place ads in magazines, on the radio and in movie theaters during previews for PG and PG-13 rated movies.

To highlight the new line, Penney is building separate American Living shops within many of its new stores in hopes of enticing new shoppers and drawing attention to the exclusive brand.

The launch comes as shoppers have cut back on spending amid the housing market slump and rising fuel costs. Penney's same-store sales fell in both December and January.

JC Penney’s chief marketing officer Michael Boylson was quoted as saying “Rather than pull back when it is tough, you've got to give customers a compelling reason to prefer you over someone else."

Finally, someone who gets it.

In what can best be described as hovering consumer recession, many retailers are cutting back on their advertising and marketing efforts in an attempt to keep costs down. But, as Boylson put it, now is the ONE time when you need to give consumers a reason to shop.

According to this article in the Financial Times, it is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.

So will the biggest merchandise launch in JC Penney history pay off?

I think the FT said it best: Successful companies do not abandon their marketing strategies in a recession; they adapt them.