Jul 16, 2008
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JC Penney celebrates latest brand launch in style

Jul 16, 2008

By Nicole Maestri

NEW YORK (Reuters) - Consumer spending may have slowed and U.S. retail sales are struggling, but the environment has not dampened J.C. Penney Co Inc's efforts to celebrate its latest brand launch in style.

On Tuesday night, the mid-priced department store operator threw a party to introduce Fabulosity, the new fashion sportswear line designed by former runway model Kimora Lee Simmons that will be sold exclusively at Penney for the back-to-school shopping season.

The event, held at a club in Manhattan's trendy Meatpacking district, featured pounding music, free drinks, a rotating disco ball and an appearance by Simmons, as she introduced her new clothing line with a fashion show.

"I really demand that all my divas look fabulous," Simmons told the crowd, but added that shoppers should not have to spend their last dime to look that way.

Fabulosity is one of six new brands Penney is introducing for the back-to-school season -- the largest number it has launched at one go for the start of a new school year.

Back-to-school season marks Penney's second-largest sales season behind Christmas. Penney's sales and profits have been battered this year as middle-income shoppers rein in spending, but the retailer has refused to pull back on plans to introduce new and exclusive brands as it tries to gain market share.

While consumers may be looking to stretch their dollars in the tough climate, Ken Hicks, Penney's president, told Reuters at the event that the retailer has not stepped up its promotions.

"We're not increasing that," he said.

Instead, Penney has increased its advertising and marketing efforts, targeting teenagers in particular, he said.

For instance, this weekend, the retailer is starting its in-theater campaign, in which back-to-school advertising spots will be shown in U.S. movie theaters just before the trailers.

While mall traffic has been falling this year as consumers shop closer to home, Hicks said he is confident teenagers and their moms will head to the mall, where many of its stores are based, to do their back-to-school shopping.

"At appointment times like back to school, the customer is coming to the mall," he said, because it eliminates the need to drive from store to store to finish their shopping.

"The price of gas to go to five different stores is very expensive."

Hicks said he also expects online shopping to play a key role in back-to-school sales, and free shipping offers are crucial to shoppers scouring the web for deals.

The six new brands Penney is launching for the new school season include the denim-inspired Decree brand for girls, the hip-hop feel of Fabulosity and the more preppy American Living for young men.

Hicks said the new brands are catching on with shoppers. "We're already seeing some selling," he added.

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