The Oscar's Red Carpet was the center of the universe Sunday night, featuring wildly expensive couture and jewels, taut bodies and sometimes tauter faces. But turns out, fashion's biggest night was hijacked by J.C Penney.
Yes, J.C. Penney. The boring one.
The 110-year-old retailer used Hollywood's hottest night to reveal its own facelift. The company, now led by former Apple Inc. executive Ron Johnson, unveiled five clever ads during the Oscar telecast, featuring spokeswoman Ellen DeGeneres. The time-traveling ads, part of an $80 million a month advertising campaign, are designed to influence the country that J.C. Penney has changed and that it's time for America to give it another look-see. The ads had impact during the telecast, standing out with Degeneres's likeability and the compelling "Fair and Square" messaging.
The retailer also showed its influence chops by refusing to back down to pressure from the conservative advocacy group One Million Moms. The group urged a boycott of stores, demanding that J.C. Penney fire DeGeneres because of her sexual orientation. Penney's stood its ground. President Michael Francis said, "We couldn't think of a better partner to help us put the fun back into the retail experience."
Penney lost ground to rivals Macy's and Kohl's in recent years and lags in sales per square foot, done in by its incessant price-cutting. That was the point of this round of ads, as the lighthearted Degeneres traveled back through a bevy of time periods, poking fun of coupons and shopping hassles. The new pricing plan replaces the chain's coupon-happy attitude with what the ads call "Fair and Square" pricing. More predictable. Fewer hassles.
Nearly three-quarters of Penney's $17.8 billion revenue last year came from steeply discounted items. In a news conference last week, Johnson said that in the past 10 years, sales by discount have risen to an average of 60 percent off. Test markets showed customers like the new pricing, though Wall Street is waiting to see if the overhaul of margin-sapping discounts will help the company hit its goal to triple sales.
Penney's 1,100 U.S. stores are also bringing in influential brands including Martha Stewart (to the chagrin of Macy's, which also features Stewart) and fashion designer Nanette Lepore and plan to carve each store into neat boutiques, hoping to replicate the success of their current store-in-store boutique, Sephora Cosmetics.
Chief Executive Johnson, who built Apple's highly successful retail chain, says Penney's needed a new direction and is betting that America will respond positively, helping its sales soar – without the early bird specials.