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Penney's Stores to Feature Items for Minorities : Merchandising: The retailer cites research into customer preferences. Southern California will be the focal point.

September 09, 1993|BRUCE HOROVITZ | TIMES STAFF WRITER

Retail giant J. C. Penney Co. is about to adopt a first-of-its-kind minority merchandising program--catering to African-Americans and Latinos--that will have its focal point in Southern California.

By October, two dozen Penney stores in Southern California will join the program, offering merchandise that includes new pantyhose developed by Essence magazine, linens with bold African prints and Flori Roberts Cosmetics for women of color. Clothing will generally feature bright colors and the "baggy" fashions popular in urban America. The items will be sold in all departments of the stores.

The program will begin nationwide next month in 170 stores, with the largest concentration in Southern California stores in San Diego, Long Beach, Hawthorne, Pasadena and North Hollywood. The move follows two years of minority consumer studies and highly successful test-marketing efforts to appeal to blacks and Latinos.

"As we grow, we have to make sure we are fulfilling the needs of all of our customers," said Geralda Miller, special segment manager for women's fashion at the Plano, Tex.-based chain. "We see this as an opportunity to bring more customers into our stores."

The program--which will take place at locations where at least 25,000 African-Americans or Latinos live nearby--may eventually be expanded to cater to Asian shoppers as well, Miller said.

Although some experts warn that minority-conscious merchandising could alienate some mainstream customers, most marketing executives say Penney is doing the right thing.

"Sure, there's a risk," said Gary Berman, president of the Coral Gables, Fla.-based marketing research firm Market Segment Research.

"But most major retailers have been slow to try to tap into minority markets, primarily because of a lack of understanding of their needs."

Minorities are America's fastest-growing population segment, Berman said. An estimated 31 million African-Americans wield annual purchasing power of $220 billion, and the 25 million Latinos in the United States have a combined spending power of $185 billion, he estimated.

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"J. C. Penney is telling its minority customers, 'We recognize you and your patronage and we're willing to stock merchandise that only you may be interested in,' " said Ken Smikle, publisher of a Chicago-based newsletter on black consumers, Target Market News.

Penney has recently begun to distribute a catalogue for African-Americans to nearly 1 million consumers three times annually, said William E. McCarthy, president of the chain's catalogue division.

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Analysts said Penney is the first large retailer to cater to minorities on such a broad basis.

"The key is that they will offer customers a better selection of merchandise," in a strategy similar to that of retailers in other niche markets such as tall people and those who wear large sizes, said Thomas Tashijan, an analyst with First Manhattan in New York.

"Other stores have tried this in more scattered approaches, but Penney has done it on a wider scale--centralized purchasing," he said.

However, news of the program left some civil rights activists unimpressed.

"If they would elevate their minority staff members to management positions and educate the company to their communities, then I would call that a positive contribution," said Victor Smith, president of the Dallas branch of the National Assn. for the Advancement of Colored People.

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"I have a problem with them targeting us as 'the minority consumer,' " said Rosa Rosales, Texas director of the League of United Latin American Citizens in San Antonio.

"We definitely want to be targeted in top management positions, because the Latino community is not represented in numbers in corporate America."

The Associated Press contributed to this report.

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