What a difference a new CEO makes.
A few years ago, real-estate developer Kemper Freeman wanted J.C. Penney gone from Bellevue Square.
Now, with former Apple retail guru Ron Johnson at Penney’s helm, Freeman said he’s happy to report that Penny will stay and soon begin a massive overhaul of its Bellevue Square store.
Plano, Texas-based Penney is on a mission to boost its slumping sales and refresh its tired look by upgrading some 1,100 stores over the next two years.
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Under Johnson’s direction, Penney plans to turn its stores into collections of smaller shops and showcase popular brands.
Freeman said he’s been to a mock-up of the “new J.C. Penney” in Dallas and believes that’s what is needed to win back customers.
“I could walk into an existing Penney store and not be interested in anything,” he said. “I walk through this store” — Johnson’s model store — “and there’s nothing I don’t want to buy.”
Penney rolled out the first phase of its store-within-a-store revamp nationwide last year, but Freeman said Bellevue Square will be among the first to get a top-to-bottom makeover. The goal is to keep the store open through construction and finish within two years.
Although details still are being worked out, Penney will continue to have a large footprint and remain “more or less in the same spot,” he said.
Freeman talked about Penney’s plans late Wednesday at an event in downtown Bellevue, where he received an inaugural “Icons of Retail” award from the University of Washington-Bothell. Penney did not return a phone call or email seeking comment Thursday.
Freeman said he tried to persuade Penney to invest in a major overhaul for more than a decade before Johnson came on board in fall 2011. Penney has been at Bellevue Square since 1958, and Freeman said he offered to buy it out of its lease a few years ago.
“We tried for 15 years to give the customer some reason to shop there,” he said. “I don’t mean fancy. I mean just be a good retailer. They hadn’t had a new idea for 15 years.”
Freeman is betting that Johnson, who’s widely credited for turning Apple into a retail juggernaut, will bring the same mojo to Penney, which has struggled amid increased competition from the likes of Macy’s and Kohl’s.
Johnson’s predecessor, Myron Ullman, couldn’t turn Penney around despite new partnerships with popular clothing line Mango and Sephora cosmetics.
Johnson aims to create mini-stores within Penney’s large department stores to appeal to younger shoppers and to better display brands, including Buffalo jeans, Levi’s and Disney. Johnson also moved away from a coupon-based strategy to everyday low prices, but he recently promised to resume some promotions after three straight quarters of sharp sales declines.
Penney’s stock trades around $20, the low end of a 52-week range between $15.69 and $43.18.
“Wall Street’s worried about whether it’s too little, too late,” said retail consultant Jeff Green. “I don’t think it’s too little. I think it’s a great concept. My question is, is it too late?”
Freeman, who came to know Johnson while working on Apple’s original store and a new, larger one at Bellevue Square, said Wall Street just needs to show a little patience.
“Turning around a big retailer like that is hard,” Freeman said. “But if anyone can do it, he can.”
Kemper Development buys final piece on mall block
Bellevue Square owner Kemper Development has bought the last piece of property it didn’t already control on the big block where the mall is located.
Kemper paid Khorram Family Investments about $3.13 million Thursday for the 0.3-acre property at the northwest corner of Bellevue Way Northeast and Northeast Fourth Street, according to county records.
The Khorrams’ Oriental Rug Co. store has operated on the site for decades. Kemper’s long-range plans call for more retail development in that part of the block.
Seattle Times business reporter Eric Pryne
Amy Martinez: 206-464-2923 or firstname.lastname@example.org