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JC PENNY News: the department store chain is relaunching its home goods sections

On Thursday, the department store chain is relaunching its home goods sections. It has brought back many of the more affordable, no-frills brands the former Apple executive ditched and reduced the space given to trendier brands he thought would bring in new shoppers.

Penney is trying to rebuild its home business by offering more lower priced items, more in-house brands and additional floor space for basics like towels and comforters. The retailer wants to recapture former clients and go head to head with rivals like Target Corp (TGT.N) and Kohl’s Corp. (KSS.N) Fixing the home business is crucial to Penney’s fledgling turnaround, both in-store and online, where it generates half of jcp.com’s sales.

“Home is a traffic driver for the whole store,” said Jan Hodges, senior vice president in charge of Penney’s home goods business. Store visits fell 17 percent during Johnson’s term and continued to slip in 2013.The company, once a leader in the sector, saw sales of home goods plummet to about $1.3 billion in 2013 from $4.2 billion seven years earlier.In 2006, home products generated about 20 percent of Penney sales, on par with rivals Macy’s, Kohl’s and Target Corp. Last year, they were about 12 percent.

To be sure, some of the decline stemmed from its decision to get rid of its catalog order business in 2011, but most of it was from misreading its customers.Initial reaction has been positive. Citigroup upgraded the stock on Tuesday because it expects the new home sections will lift sales. Penney shares have risen since it gave an upbeat 2014 forecast last month but are still 55 percent below a yearly high hit last May.

“They went astray when they brought in $10 cake mix,” said Kathy Gersch, a former department store executive and co-founder of Kotter International, a consulting firm that helps companies implement strategies. “The question remains whether they can get that customer back.” Penney will have to win back shoppers who drifted to competitors. At HomeGoods, owned by TJX Cos, sales nearly doubled to $2.8 billion between 2007 and last year, while Target and Kohl’s saw steady growth.

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