Midwestern mothers, meet Madison Avenue.
Five new J.C. Penney Co. Inc. stores feature a mini Sephora, which offers a variety of high-end makeup, lotions and fragrances. Sephora USA LLC is owned by LVMH Moet Hennessy Louis Vuitton SA. The Glendale Galleria is one of the locations.
Penney’s laid out an accelerated growth program last week as it opened 20 new stores. This is the biggest round of openings for the $19 billion chain based in Plano, Texas, since the 1970s. Long in need of a facelift, it’s no surprise that Penney’s would turn to one of the hippest and fastest-growing beauty chains as part of its much-needed brand overhaul.
Sephora has built its brand with free-standing stores in upscale, metropolitan city malls, offering savvy and educated salespeople and encouraging customers to test and smell a wide variety of hard-to-find lines, including its own eponymous brand.
Sephora’s devotees might be surprised to find their beloved BeneFit, Stila and Philosophy brands at a retail outlet perhaps known for quality, but utilitarian, T-shirts and underwear. Sephora, however, sees the move as a way to broaden its audience.
“Sephora’s partnership with JCPenney allows us to dramatically raise awareness of our brand, even as we continue to aggressively build our own store base,” said Satish Malhotra, vice president and general manager of the Sephora Inside JCPenney Initiative. “There is not a lot of overlap between Sephora stores and JCPenney stores, so we believe the majority of their clients will be new ones for us, and we’re confident they will be happy to see us.”
Though their customers are very different the average age of a Penney’s customer is 48, while Sephora buyers are 25 and younger they have similar spending patterns. Penney’s customers spend about $650 each year on beauty products the same as Sephora’s base.
The Glendale location store within the department store is 2,500 square feet, about half the size of an average Sephora stand-alone.
Penny’s stock got a slight bounce on the string of announcements, and was trading around $70 last week.
Up and Inn
Los Angeles County bested the rest of the state in lodging numbers, according to the California Mid-Year Lodging Numbers posted by Ernst & Young LLP.
L.A. County posted not only the most growth, at 10 percent over last year, but also the highest average room rate, $114, compared to Orange County’s $109 average. Despite those figures, there is some concern that occupancy rates may drop as the 4,500 rooms currently under construction come online.
Troy Jones, a senior manager in Ernst’s hospitality group, cautioned that there has been a significant increase in the hotel construction pipeline in Southern California, and that occupancy levels could be under pressure in the next 18 months if demand slackens.
“We expect to see more than a 10 percent increase in the supply of hotel rooms in the market over the next couple of years and, while lodging fundamentals are sound, demand levels will need to continue to absorb these new projects as they come online,” he said. Average hotel occupancy in California was 69 percent through the end of June, up 1 percent from the year before and 6 percent higher than the national average. The report cited high gas prices as a reason for the state’s growth, suggesting that Californians decided to vacation closer to home this summer.
Raising Stakes
Morton’s Restaurant Group Inc. is on an expansion binge in L.A. County. With upcoming Woodland Hills and Anaheim locations, the steakhouse chain is already on the hunt for more L.A. turf, possibly in Santa Monica, a company official said.
The Woodland Hills restaurant, 8,100 square feet in the Triana Warner Center, is expected to bow next year. The company signed a lease to open an Anaheim steakhouse early this summer.
There are currently eight Morton’s in California, including spots in Beverly Hills, Burbank, downtown Los Angeles and Santa Ana.
Staff reporter Emily Bryson York can be reached at (323) 549-5225, ext. 235, or at
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