Ken Hannah, chief financial officer of JC Penney, has reiterated that the US department store remains committed to its ongoing transformation, including the implementation of its in-store shops.

"We're very pleased with the shops that we opened in August," Hannah told investors at the Goldman Sachs 19th Annual Global Retailing Conference on Wednesday (5 September).

"We saw some very encouraging results in the first couple weeks of August."

The retailer launched the first of the in-store shops in July, introducing the Levi's, i jeans by Buffalo and The Original Arizona Jean Co brands to 700 stores. Hannah said the aim is to bring "new mechandise, a broader assortment and a changed experience" to customers.

"The feedback from the customer has been very positive and we believe we're well on our way to transforming America's favourite store - a specialty department store," Hannah said.

JC Penney unveiled its second wave of in-store shops last week, to debut the Liz Claiborne, Izod and the company's new JCP private basic clothing brand. 

"We are committed to investing in our shop strategy and believe it is the best return that we can provide to our shareholders," Hannah added.

There are no plans to open any more shops this year, he said, making sure the holiday period is not disrupted.

JC Penney is looking to put a total of 100 shops inside each of its 700 similar sized stores. "So the way that we're rolling out the shops is we're opening in the same stores," he said.

"I think we saw enough [progress] in the August shop performance to remain committed to the strategy, to continue to move forward," Hannah added.

Technology growth
He told investors the majority of the retailer's capital is being invested to change the in-store and shopping environment.

"Most of our capital is to be deployed through our technology platform as well as the shop concept, where we're putting hard capital in our stores to create an environment that we believe will create America's favourite store," he said.

Most of the investments are directly related to changing the store and shopping environment. He said the only "constraint we have today in terms of how fast we're able to do that is the capital required to make the transformation".

Using radio-frequency identification (RFID) and tagging merchandise "will allow us to have better control over the inventory and also a better insight into the in stock position", Hannah said.

Last month, the retailer swung to a second-quarter net loss and said it will not meet its full-year forecasts because of lower than expected sales. Net loss reached US$147m over the three months ended 28 July, compared to a $14m profit in the same period last year.

Looking forward, Hannah told investors the company is going to see similar second-half results as it saw during the first six months of the year. "From a planning perspective, we're going to see a back-half that's consistent with the first half," he said.