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JCPenney continues to leverage Sephora for its turnaround efforts, but the minimal amount of control it has over its biggest growth driver is worrisome.

To-the-point analysis about one of the five important stories from the week.  

What happened

  • JCPenney has turned to the beauty world as it tries to keep itself afloat, utilizing Sephora shop-in-shops and The Salon by InStyle to drive shoppers into its stores by providing unique experiences. The idea is that beauty products and these experiences will bring in customers who will then stay in the store and buy many more products from JCPenney’s flagship offerings.

Why it matters

  • These Sephora shops are the best-performing segment of JCPenney stores. While this goes a long way toward making the department store a destination and is a great new customer acquisition tool for Sephora, it’s worrisome that so much growth is coming from a shop-in-shop, and not anything JCPenney is doing itself. This poses serious risk to JCPenney: Sephora could change its mind or stop expanding the program at any moment. What happens if Sephora wants to open its own store in a mall where JCPenney is already located? It seems the two companies are on a collision course that won’t end well for JCPenney. 

  • While this partnership also extends online, it’s unclear why someone would buy cosmetics online at JCPenney if she can buy the same thing online from Sephora. While customers can get Beauty Insider points—Sephora’s loyalty program—from in-store JCPenney purchases, this incentive does not exist on JCPenney.com, further complicating these efforts. Generally speaking, companies should base their turnaround efforts on initiatives that they have relative control over.   

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