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JCPenney stocks a new Portfolio

Published Oct. 16, 2005

As J.C. Penney Co. yanked most hard goods from its department stores over the past few years, a notable exception was furniture. Instead of being unceremoniously dumped, JCPenney's furniture collection is disappearing slowly. A new version is is appearing at JCPenney's latest experiment, Portfolio, the ninth of which opened in the Shoppes of Carrollwood two weeks ago.

Customers and competitors agree Portfolio is nothing like the old JCPenney furniture department.

At 40,000 square feet, Portfolio displays more than five times the selection. Prices are higher and the quality level ranges from middle-of-the road to such quality brands as Century and Knob Creek. Side chairs priced as low as $99 share space with a $3,000 leather sofa.

JCPenney decided to move its furniture business out of the mall for competitive reasons and because more people now want to buy quality furniture.

"With only 7,000 square feet of furniture in a mall store we couldn't compete with 40,000-square-foot furniture stores," says David Miller, JCPenney's chief operating officer.

So JCPenney moved to strip shopping centers where cheaper floor space can generate bigger profits with other goods. JCPenney also dodged the expense of storing bulky and expensive furniture inventory in a warehouse.

Except for accessories, all Portfolio furniture comes direct from the manufacturer. So JCPenney has little cash tied up in inventory. A contractor handles customer delivery. But customers have to wait a month or two for their purchases.

Some competitors think that could hurt JCPenney's ability to provide the instant gratification that many customers want.

But JCPenney wants to use the formula as a way to bring some lower prices to the quality furniture market. Customers can buy exactly what they want rather than what's in the warehouse. Many items on display at Portfolio are done in different finishes.

But the biggest difference is the presentation. JCPenney's professional decorators in Dallas laid out 30 rooms, all with matching accessories. Room displays include the plates, silk flowers and silverware on a dining room table; the window treatments in a bedroom and handmade comforters on the beds.

Portfolio is a knickknack hunter's dream. More than 5,000 accessories, some one-of-a-kind antiques and limited edition prints, are stuffed in with brass and glass accent pieces. Dozens are used to decorate each display.

"They display the furniture very well," says Lee Hanks, manager of a rival Robb & Stuckey store a few miles away on North Dale Mabry Highway. "They're opening in the neighborhood already has brought us more traffic."

"I think it's going to work for them," says a store manager for another major competitor who didn't want to be identified. "They're offering lines of furniture customers aren't going to see any other way in a really well-done setting."

"And if you like the way we've decorated a room, we'll sell you the whole thing, furniture, carpets and accessories," says store manager Phyllis Roman.

Some rooms run up to $5,000. But accessories are priced as low as $3, such as a scented candle shaped like a strawberry. Unlike most furniture stores, Portfolio also has a full bedding and linen department offering moderate- to better-quality goods.

Portfolio is an experiment. JCPenney will open 10 more this year. But officials say they aren't sure what the future holds except that the next store will be the third to open in suburban St. Louis.