Three years ago, J.C. Penney (NYSE:JCP) made a surprising decision to reenter the appliance market after more than three decades on the sidelines. Then-CEO Marvin Ellison was searching for ways to drive more traffic to JCPenney stores and diversify away from the highly weather-sensitive apparel business. The company seemed to have a brief window of opportunity to make a name for itself in the major appliance business, as customers were rapidly abandoning longtime appliance market leader Sears Holdings.However, the appliance experiment didn’t work out as well as Ellison had hoped. Now, new CEO Jill Soltau has decided to exit the business again as she tries to turn around the struggling department store chain.
Appliances: The good, the bad, and the ugly
J.C. Penney’s move into the appliance market wasn’t a complete bust. Between early 2016 and mid-2017, the company added appliance showrooms to about 600 stores. This enabled it to seize a roughly 1% share of the U.S. appliance market — and drove a big increase in J.C. Penney’s home department sales, which rose from 12% of the company’s total sales in fiscal 2015 to 15% in fiscal 2017.
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