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Subs: Coffee Update

Now, Johnson spilled the beans on this last fall but nothing has been formally announced. This seems like a simple things but it is important. Places for spouses or shoppers to take a break and relax and NOT have to leave the store to do it means longer times in the store which will correlate to more purchases.

Think about it, your at the mall with your wife/girlfriend and where do you want to go? The store that has a coffee shop w/wifi and couches to watch the game? Me too…. “shop away Hon, I’ll be here watching the game”

From the Jacksonville Daily Record:

by Karen Brune Mathis, Managing Editor

J.C. Penney Co. Inc. hasn’t confirmed a partnership with Caribou Coffee Co. Inc., but plans filed with the City indicate the retail chain is adding coffee bars in its stores featuring the Minneapolis-based company’s products.
Building permit applications under review at the City show “JCP-Caribou Coffee” plans for the JCPenney stores in Regency Square Mall and The Avenues mall.

Titled “Caribou Coffee ‘Commissary’ rollout,” the plans show Caribou Coffee bars on the second level of each store near the escalators.

“We have not confirmed or publicly announced a partnership with Caribou,” said J.C. Penney Co. spokeswoman Sarah Holland in an email.

She said construction barricades indicate the new Joe Fresh shops scheduled to launch this spring. Penney said last year it would open shops for Canadian fast-fashion label Joe Fresh in stores this spring.

The Joe Fresh shops will offer women’s clothing such as dresses, T-shirts, denim and silk blouses. The Joe Fresh apparel also will be sold at reported in July that the company has been focusing on restructuring its stores to add more store-within-a-store concept, including Sephora and MNG by Mango, a Spanish clothing chain, followed by boutiques for Levi’s and other jeans brands. said the midpriced department store operator has been seeking a way to stem declining sales. Under a new CEO, former Apple Inc. executive Ron Johnson, the company has been overhauling the business from pricing to brands.

The permit applications and construction plans filed with the City show the purpose of the coffee areas is to “create a retail space designed specifically for the purpose of displaying and selling food and beverages.”

Plans indicate an espresso machine and others that includes brewer, grinder and related equipment.

The Regency Square store area for Caribou Coffee totals 405 square feet, consisting of 151 square feet for the coffee bar and 254 square feet for the commissary, which is in another part of the second level.

The commissary is described as “a support area for the Caribou Coffee” space, including for storage and preparation.

The Avenues store area for Caribou totals 402 square feet, with 156 square feet for the coffee bar and 246 square feet for the commissary.

Each build-out project is shown as a $55,000 interior tenant improvement.

A spokeswoman said the company could not comment.

Plans show the JCPenney, at Regency Square Mall, at 9501 Arlington Expressway, is a two-story, 173,064-square-foot store.

The Avenues JCPenney, at 10308 Southside Blvd., is a two-story 129,568-square-foot store.

Plans show Little Diversified Architectural Consulting of Charlotte, N.C., as the architect for the Caribou Coffee projects.

Caribou Coffee was founded in 1992 and says that based on the number of coffeehouses, it is the second-largest company-owned premium coffeehouse operators in the country.

It said that as of Sept. 30, it had 610 coffeehouses, including 202 franchised locations, in 22 states, the District of Columbia and 10 international markets.

Caribou Coffee also is sold in grocery stores, mass merchandisers, club stores, food-service providers, hotels and in more channels.

Caribou Coffee and the Joh. A. Benckiser Group announced in December they reached a definitive merger agreement for a JAB affiliate to buy Caribou Coffee for about $340 million.

When the deal is completed, Caribou Coffee will continue to be operated as an independent company with its own brand, management team and growth strategy, it said. It will remain based in Minneapolis.

Benckiser also has a major stake in Peet’s Coffee & Tea Inc., among other companies.

J.C. Penney Co. Inc. is based in Plano, Texas, and has about 1,100 stores.

It attempted to wean customers from the long-standing use of coupons by establishing basic price structures, but sales dropped.

For the third quarter that ended Oct. 27, the company reported a net loss of $123 million, which was better than the $143 million net loss in the third quarter the year before.

Comparable-store sales were down 26.1 percent, while total sales were down 26.6 percent to $2.93 billion.

However, Johnson said the performance of JCP’s move to new brands and shops “reinforces our conviction to transform jcpenney into a specialty department store.”

“Today, jcp is really a tale of two companies. By far the largest part of our store is the old jcpenney, which continues to struggle and experience significant challenges as evidenced by our third-quarter results,” Johnson said in a news release when announcing the results.

“However, the new jcp, centered around the shop concept, is gaining traction with customers every day and is surpassing our own expectations in terms of sales productivity which continues to give us confidence in our long-term business model,” he said.

During the quarter, the company opened shops under the Levi’s, Izod, Liz Claiborne, The Original Arizona Jean Co. and jcp brands.

The company also opened 38 Sephora stores inside JCPenney stores, bringing the total to 386.

The company said it has transformed about 7.2 million square feet of selling space into the shop format.

Johnson left Apple for JCPenney in November 2011 and, according to media reports, stopped the practice of heavy sales, brought in new brands and replaced the rows of clothing racks with the “store within a store” layout.

He formerly was vice president of merchandising for Target Corp.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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