Exclusive: J.C. Penney pulls plug on clothing subscription service
NEW YORK - J.C. Penney Co Inc on Friday will end a clothing subscription service venture, the retailer said this week, a move toward sharpening its focus on more-profitable apparel sales and exiting lines like major appliances.
Bombfell sends customers five clothing items handpicked by a stylist for them to try on in the comfort of their own home. Penney shoppers then have seven days to decide which items they wanted to buy and which they will send back. Through the partnership, Plano, Texas-based Penney became one of many consumer companies to pitch online subscription services. The strategy has not always worked.
This month, Penney announced it would stop selling major appliances including fridges and washing machines, and revamp the layout of its stores in a bid to focus on apparel to boost profits. Penney has generated a quarterly profit just three times since 2012 and analysts expect it to report another net loss in the fourth quarter.
Its bonds were downgraded twice in the past 12 months by each of the three main credit rating agencies and now stand six notches into junk bond territory. Its longest-dated obligation, a $500 million “century bond” issued in 1997 and maturing in 2097, is quoted at 35 cents on the dollar and has lost half its face value in the past year.
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