J.C. Penney, in one of its first major moves under newly arrived CEO Marvin Ellison, said it will once again start selling major household appliances starting Feb. 1. The company stopped selling kitchen and laundry appliances in 1983.
Penney will be selling GE, Hotpoint, LG Electronics Inc, and Samsung Electronics appliances in 22 pilot stores nationwide and online starting in the spring. Its sales of other home goods were some 12% of its sales in 2014.
Appliance sales have been a rare strength in retail. Best Buy reported a 13.4% increase in Q4 same-store appliance sales, and the area is also a strong one for Sears, which remains the country’s largest seller.
J.C. Penney’s re-entry into appliances sales could hit Best Buy and Sears, which like Penney is also often a mall anchor. Both retailers enjoy healthy sales in the space despite their struggles in other areas.
In 1983, Penney, like many, moved away from selling non-apparel merchandise in favor of focusing on apparel, which in those days was a strong sector. But today, apparel sales are a weak spot in retail.
The move is one of the first by Ellison, who is tasked with moving the retailer forward after having dug out from under the ill-fated tenure of ousted CEO Ron Johnson, who changed up its approach by ending its near-constant price cuts. That, among other moves, turned off many of its loyal customers.
Penney has made an unusual deal with appliance makers to eschew holding any inventory beyond what’s in stores in order to protect its cash on hand, $638 million as of Oct. 31. The retailer hopes that its new offering will bring in more customers who will sign up for its store card and boost its loyalty program.
But it remains to be seen whether shoppers will perceive Penney as a place to buy their washer-dryer or refrigerator.