J.C. Penney Co. reported Friday that its earnings rose 63 percent in the third quarter, as the department store chain says it saw strong reception to new exclusive brands such as Liz Claiborne and MNG by Mango. It offered a solid profit outlook for the holiday quarter but said that the retail picture will remain competitive.
Penney's, like most retailers, faces increasing prices for commodities like cotton. During a conference call with investors Friday, Myron E. Ullman III, Penney's chairman and CEO, explained how it's dealing with the rising costs.
Q: What are some initiatives that you are embracing to help mitigate the cost pressures?
A: The first half of the year we feel that by working with our major suppliers we navigated that without major impact on pricing in the first half. I think (for) many competitors who work with smaller suppliers (it) may have been more difficult dealing with that. We got ahead of it. Cotton prices are ...the biggest driver of concern through 2011 and particularly in the second half. In some cases, manufacturers aren't taking orders at this point.
They don't feel like they can anticipate what their costing is going to be. We are in better shape than that. We are able to place orders. We're (working hard) to try to change the offer in a way to shield the price increase as much as possible from the consumer but the fact is if cotton goes up 50 percent ... there will be an impact on pricing. Everybody in our industry is going to feel it.