To capitalize on the booming housing market, J.C. Penney (JCP) is launching a home services division in partnership with Samsung Electronics Co. and Trane to provide remodeling services.
J.C. Penney Home Services is testing six different remodeling programs in 100 stores, with services in bathroom remodeling, heating and cooling systems, quick-ship and installed blinds. Other services include home water solutions, awnings and easy-to-install smart home devices. (See also: Why J.C. Penney Just Sold Its Headquarters.)
"With the resurgence of the housing market, consumers are spending more than $300 billion annually to upgrade their homes since nearly two-thirds of the nation's homes are over 30 years old,” J.C. Penney CEO Marvin R. Ellison said in a statement. “There is a tremendous opportunity to capture additional revenue and minimize our dependence on apparel by catering our services to female homeowners, who represent over 70 percent of our loyal customer base.”
Like many retailers, J.C. Penney has been grappling with significant declines in sales as consumers turn toward online shopping. In February, the retailer said it would close between 130 and 140 stores in the next few months. It also said it would offer voluntary early retirement packages for 6,000 employees. (See also: J.C. Penney to Close Up to 140 Stores.)
Ellison said “the time is right” for J.C. Penney to delve into providing services in categories where it already provides products like appliances, flooring, furniture and home furnishings. The move aims to acquire market share in remodeling as well as set the J.C. Penney brand apart from its department store peers and e-commerce retailers.
"Home services presents a low-risk opportunity to drive sales with minimal investment in inventory and capital resources since we are partnering with the industry's leading providers for service and installation,” Ellison said.
J.C. Penney stock is down 29 percent year to date, and down 48.6 percent the past year.