Struggling retailers are getting creative when it comes to new ways to bolster sales, and not just on the consumer level. This week, both Urban Outfitters and JC Penney announced that they are expanding into wholesale to make up for lost and lagging retail sales.
After Urban Outfitters showed flat results for Q1 this week, the company identified four areas of opportunities for growth, with wholesale being one of them. The company, whose portfolio of brands include Free People, Anthropologie, Bhldn and Terrain in addition to its namesake brand, is looking to its better performing categories to sell to other retail companies. Among those segments doing well were their home goods and beauty items.
JCPenney, on the other hand, is expanding its home growth initiative by offering their wares to the hotel and lodging industry, as well as the multi-unit residential industry. The company already has the infrastructure in place, with a long history of designing and sourcing home textiles, and with its recent re-entry into the major appliance market in 2016, JCPenney is poised to affordably accommodate hotels, innkeepers, property management companies and more to fulfill their commercial and bulk purchase needs.
“While we continue to take steps to improve our apparel strategy and assortment, we see our home refresh initiative as a great vehicle for growth and differentiation. The U.S. hospitality industry represents approximately $200 billion* annually and a significant opportunity for JCPenney to gain market share and drive increased revenue per customer with major appliances and a renewed focus on soft home goods,” said Marvin R. Ellison, chairman and chief executive officer of JCPenney.
JCPenney will also offer custom window treatments, furniture and mattresses under the new B2B division.
Urban Outfitters has been in the wholesale business for years, while JC Penney’s move to the hotel industry is a first for the company. With one company already in the B2B business and another one just entering it, it will be interesting to see if other struggling brands will go this route and if this is the answer for brands to survive.