Joe Fresh is pulling out of 200 J.C. Penney stores in the U.S. as the company works to build up its standalone store base and expand internationally. The news comes two years after Joe Fresh debuted to much fanfare at 683 of the U.S. department store chain’s stores under the direction of CEO and former Apple executive Ron Johnson, who brought in a spate of new brands and reconfigured the retailer’s pricing strategy. His makeover attempts failed and Johnson was ousted after 16 months, and many of the new brands exited soon after. At the same time, Joe Fresh opened six standalone locations in New York and J.C. Penney winnowed its selection of the cheap chic apparel line down to 200 stores.
A year ago last week, more than 1,100 factory workers died when the eight-story Rana Plaza building in Dhaka, Bangladesh collapsed into a heap of bricks and fabric bolts. Those investigating the rubble after the tragedy found clothing labels from Western retailers in the ruins of the building, which had been home to a handful of factories operating with varying levels of safety and scrutiny. This time last year, as the death toll continued to climb, Canadian fast-fashion brand Joe Fresh was one of the first to act, sending representatives to Bangladesh to investigate the building's collapse.
To say J.C. Penney has been struggling is a vast understatement. Last month, the department store reported horrific holiday-quarter results, with the most drastic decline in sales in its 111-year history of operation. In addition, former J.C. Penney CEO Allen Questrom delivered a brutal takedown of the department store's current status in an interview to CNBC, stating it "can't continue with the same leadership." But, with Johnson's recent announcement that he "has no plans of retiring," the retailer is forced to rely on a new strategy other than the CEO's departure. Enter: Joe Fresh.
Joe Fresh, the Canadian value-priced apparel brand, has opened its first permanent U.S. store in New Jersey and another in New York. The company will make its New York City debut in Manhattan’s Flat Iron District on Nov.3. A second store will open in the spring on Fifth Ave.
Broader economic warning signs — including a persistently high unemployment rate — have yet to slow down the recovery in retail sales. As a result, demand for retail space continues to grow and new concepts, of which there were few to be found at the depths of the recession, have re-emerged.