Penney Drops 3 Lines of Hard Goods for Apparel

J. C. Penney Co. said Wednesday that it will drop its less profitable home electronics, sporting goods and photographic equipment lines from its stores and expand its women’s apparel departments instead.

However, the nation’s fourth-largest retailer said it does plan to continue offering the three lines in its catalogues.

The company also said that it will expand women’s departments in the newly available store space, grouping together merchandise for specific segments of consumers. The individual departments will be more like “boutiques” in some cases.

Analysts said Penney’s had been moving to de-emphasize hard goods for some time in favor of the more profitable apparel lines. Indeed, the retailer dropped other hard lines, like automotive accessories, portable power tools, and lawn and garden merchandise from its stores in 1983.

“The move is consistent with the strategy they’ve had for some time,” said analyst Monroe Greenstein of Bear, Stearns & Co. “Penney traditionally has not made money from hard goods.”

“As they transfer the businesses, they’ll be significantly more profitable in apparel than the other businesses,” said analyst Bruce Missett of Salomon Bros. “It’s absolutely the correct decision.”

“If anything, the move should cause people to become more optimistic about J. C. Penney’s 1988 earnings,” said analyst William Smith of Smith Barney, Harris Upham & Co.