Brief

J.C. Penney expands B2B operations with hotel sales

Dive Brief:

  • J.C. Penney on Thursday announced it will begin selling bedding, bath, window treatments, furniture and mattresses to the hospitality and property management sectors, expanding its B2B operations and its home goods offerings, according to a company press release.

  • Because of its already large operations in those categories — its hedges of raw materials, work with a strong supplier base in more than 30 countries and rapid production cycle — the company is able to offer affordable prices on bulk purchases of premium items to business clients, the company said.

  • Eligible small businesses and non-profit organizations can also receive competitive discounts, bulk pricing, commercial credit offers and tax exemptions.

Dive Insight:

J.C. Penney is not the only retailer to turn to wholesale and the B2B sector as the retail environment continues to pose challenges.

Urban Outfitters this week said it will work to boost its wholesale segment as part of a new four-point plan to bring up weak sales; office supply retailers Staples and Office Depot have come to depend on their business clients to offset their retail declines; and West Elm is partnering with hospitality management and development company DDK to open its own line of boutique hotels in order to boost sales and showcase its goods. Furniture retailer Restoration Hardware is planning a similar hotel in New York City.

Hospitality and property management areas offer rich opportunity. There are some 5 million hotel rooms in more than 52,000 properties in the U.S., according to J.C. Penney. And of course, as the company notes, each hotel rooms has one or two beds, and that means a need for many sets of sheets, blankets, pillows, towels and window treatments. Rooms might as well be furnished with “luxurious, yet durable linens from JCPenney Home or Royal Velvet," the company said, noting that its B2B operations also stock uniforms, scrubs and basic workwear, as well as major appliances used to furnish apartments, condos and townhomes managed by commercial property groups.

In his statement on Thursday, J.C. Penney CEO Marvin R. Ellison said that the idea first stemmed from the fact that hotel operators were already ordering large volume purchases of bedding, bath and window treatments from JCPenney.com. The retailer is building on that by staffing salespeople experienced in working with the targeted businesses and expanding its offerings to those businesses.

"While we continue to take steps to improve our apparel strategy and assortment, we see our home refresh initiative as a great vehicle for growth and differentiation,” Ellison said. “The U.S. hospitality industry represents approximately $200 billion annually and a significant opportunity for J.C. Penney to gain market share and drive increased revenue per customer with major appliances and a renewed focus on soft home goods."

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