Olsens to Launch Junior Brand for Penney’s

Mary-Kate and Ashley Olsen have signed a deal with J.C. Penney Co. Inc. to launch Olsenboye.

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A look from Mary-Kate and Ashley Olsen's new J.C. Penney's line, Olsenboye.

Photo By A look from Mary-Kate and Ashley Olsen's new J.C. Penney's line, Olsenboye.

The Olsens, who are 23, haven’t penetrated the middle market yet with a collection, but do sell to luxury stores with The Row for men and women, and their contemporary label, Elizabeth and James. But they have been marketing clothes, furniture, cosmetics and other products to mass retailers such as Wal-Mart for years through the company they own and for which they design, Dualstar Entertainment Group.

“Mary-Kate and I watch current trends and see our partnership with J.C. Penney as an opportunity to add something unique to the marketplace, especially in the current retail climate,” said Ashley. “Olsenboye is an extension of the Dualstar brand and we feel this collaboration complements and strengthens our business portfolio, delivering trend-based fashion at affordable prices.”

Regarding the various initiatives to market Olsenboye, Mary-Kate said: “Ashley and I felt strongly about creating a unique experience to reach the teen customer, using relevant marketing strategies that would effectively reach this key customer demographic.”

According to Sweney, the Olsens came to Penney’s with the Olsenboye concept. “They actually contacted us,” she said. “They knew we had a wider reach, that we can provide a great digital experience and that we know how to treat brands and that their brand would be pure in our store” and not be “Penney-ized.”

Penney’s remains mired in the recession as much as any of its competitors. On Friday, at an analysts’ meeting, Myron “Mike” Ullman 3rd, chairman and chief executive officer, said, “Clearly the consumer is still under enormous pressure,” though the company is starting to see “some stabilizing and modest improvement in traffic.” It’s 1 to 2 percent down these days, he said, from more than 3 to 5 percent in the summer, and higher before. “We are a bit more upbeat about the opportunity to sell.…We are confident in our ability to execute against last year’s trends. Competitively, we are doing well.”

The company has been hurt mostly by weak jewelry and home sales, but has seen improvement in the textile, bedding and window-covering businesses in the last 60 days.

Jewelry remains difficult, ahead of its profit plan but behind in the sales plan, Ullman said.

Penney’s officials said the new Manhattan store is exceeding plan and, based on its early success, the company is encouraged to pursue additional inner-city opportunities. According to Ullman, the Manhattan store is not cannibalizing the Bronx or Queens units, and they are producing comp gains. As a result, Penney’s has had its eye on Brooklyn and Dallas (inside the Beltway, where there are two million people). One source said Harlem has been eyed, as well. Said Ullman: “One hundred fifty thousand people have moved into the Dallas inner market. Where we think there is a J.C. Penney customer, we are going after those opportunities.”

However, more capital will go into renovations, the Web and information technology than store openings, considering commercial real estate development has virtually come to a halt due to the economy. About 75 Sephora shops will be installed in Penney’s stores next year, and the company will use the occasion to remodel stores and renovate fitting rooms and bathrooms.

The lack of commercial development “allows us to invest in our existing fleet.…We are looking for opportunities now for inner-city locations, but if we compromise on the box size, it hurts us,” Ullman said.

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