J.C. Penney is gunning for the appliance sales lost to Sears as that iconic retailer continues to massively shrink its once formidable U.S. footprint, CEO Marvin Ellison told Fortune magazine on Thursday.
"We're going after Sears and we're going after market share that we think is going to be available not only now but as they continue to contract," Ellison said.
And Sears is definitely continuing to contract. The company on Thursday announced another 100 closures of Sears and Kmart stores.
For nearly two years now, Ellison has talked about Sears "donating" market share in appliance sales to his company — it's likely part of the reason that Penney returned to appliance sales after three decades away from them, and, later, home services — both areas that it had abandoned.
The play appears to be paying off, to the extent that it can. J.C. Penney, after a tumultuous autumn period that included a sweeping away of underperforming women's apparel, surpassed expectations at the holidays with a 3.4% increase in same-store sales in November and December. An increase in appliance same-store sales in that period was a significant contribution, Ellison told Fortune.
Ellison isn't necessarily aiming to topple Sears from its perch, so much as take market share as it falls off. "We have no aspirations to be No. 1 in market share for appliances," he told analysts in 2016. "To do that, we have to own the inventory. But we think we can be disruptive and can be convenient to our customers."
The moves also help balance Penney's merchandise and service assortment as it continues to struggle in apparel. J.C. Penney has boosted the number of Sephora cosmetics operations in stores, and beauty, home, salon and fine jewelry are the retailer's better performing divisions in recent quarters.
In fact, those Sephora beauty concessions are likely doing more for J.C. Penney than its appliance sales. "The impact of having a popular beauty player as part of the offer cannot be underestimated," GlobalData Retail managing director Neil Saunders said in a note emailed to Retail Dive last year. "Without it, customer traffic and sales would have tumbled far further and faster; and JCP would have attracted far fewer younger shoppers."
While Sears is rapidly depleting its store count, resorting to appliance sales on Amazon, and surely losing market share, it hasn't completely thrown in the towel in the space. Last year Sears opened a handful of appliance and mattress stores that the company says are resonating with customers.