Shares in J.C. Penney popped 3.7% on Tuesday after the discount department store retailer announced it’s adding new 500-square-foot Nike brand shops in “prominent locations” within the men’s departments of more than 600 of its stores.
The concessions will be festooned with giant Nike “swoosh” signs, what the retailer calls “motivating” images of Nike-wearing athletes, dedicated mannequins and updated lighting, J.C. Penney said.
J.C. Penney and Nike teams tested various visual elements at a Penney store in Nike's hometown of Portland, OR to create the inspiring environment for the men's department, and there will also be similar Nike visuals in some stores for women and kids, the company said.
Activewear is a hot category in the otherwise-troubled apparel retail segment, with its popularity extending even outside the gym — a trend John Tighe, Penney’s chief merchant, acknowledged in his statement Tuesday.
"Nike is immensely popular across all categories and with the rapid rise of activewear and athletic shoes, we want to have the best expression of Nike in any department store," Tighe said. "J.C. Penney is an activewear destination, and by partnering with a perception-shifting national brand like Nike, we can deliver both the performance and athleisure products that customers want."
The effort is similar to the Kohl’s-Under Armour partnership announced last July, which has the athletic apparel maker's gear in 1,100 Kohl’s stores nationwide. Unlike the Penney-Nike project, however, the partnership with Kohl’s is part of Under Armour’s ongoing effort to boost sales to women, something that Morgan Stanley analyst Jay Sole a year ago said is a weak spot for UA. “[W]e think Kohl's is a great evolution for us,” Under Armour CEO Kevin Plank told investors in July about the tie-up, which begins in earnest this year. “We think that the female consumer that she's there, she's shopping and she's buying.”
That could present trouble for Nike and J.C. Penney, considering that Penney’s apparel and women’s business continues to struggle, and that the robust women’s activewear business offers significant opportunity for growth. Amazon is also reportedly adding athleisure and fitness clothing to its house lines of apparel.