Table of Contents

1. Key Highlights:
2. Introduction
3. Private Labels as Strategic Assets: How JCPenney Built Momentum
4. Why St. John’s Bay and Liz Claiborne Resonate with Shoppers
5. Merchandising Strategy: Mixing Private and National Brands on the Salesfloor
6. The Economics: Why Private Labels Improve Retail Margins and Control
7. Upgrading Private Labels: Retailers Reinvesting in Design and Packaging
8. Consumer Attitudes: What the Data Shows About Store Brand Acceptance
9. Apparel as the Key Battleground
10. Supply Chain: Speed, Cost Control and Risk Management
11. Marketing Private Labels: From Value Messaging to Storytelling
12. Competitive Responses: What Rivals Are Doing
13. Risks and Limitations of a Private-Label-First Strategy
14. Where Private Labels Excel—and Where They Don’t
15. Real-World Comparisons: What Works Elsewhere
16. Implications for Shoppers and Competitors
17. What to Watch Next
18. Lessons for Retailers Building Private Brands
19. The Bigger Picture: Private Labels and the Retail Ecosystem
20. FAQ

Key Highlights:

• JCPenney’s private labels now account for more than half of its sales, with St. John’s Bay ranking as the retailer’s top-selling brand and private-label penetration up five percentage points since 2019.
• Retailers are investing in elevated private brands—upgraded design, supply-chain control and integrated merchandising—turning store brands from value-only offerings into credible style alternatives.
• Apparel is a strategic growth area: private-label apparel is gaining traction across age groups, sizes and categories as retailers use internal design and faster production cycles to respond to trends.

Introduction

JCPenney’s private labels have moved past bargain-basement anonymity and become central to its recovery plan. St. John’s Bay, a longstanding in-house casual line, has emerged as the retailer’s top-selling brand, eclipsing national names such as Nike and Levi’s. That shift reflects broader forces in retail: price-conscious consumers, upgraded private-label execution, and a deliberate merchandising strategy that places private and national brands side-by-side.

The rise of store brands at JCPenney offers a case study in how legacy retailers can leverage owned labels to drive traffic, margin and customer loyalty. The company reports private-brand sales penetration rising five percentage points since 2019, and private labels now represent over half of JCPenney’s total business. That momentum comes as JCPenney pursues a turnaround involving marketing, supply-chain investments and novel brand partnerships. The result: private labels are no longer only about lower price; they are becoming trusted, fashionable, repeatable choices for shoppers.

This piece maps how JCPenney got here, why certain private brands perform so well, how merchandising and supply-chain choices amplify success, and what this means for customers and competitors. It also looks at the wider retail response—how rivals are redesigning private labels and what to expect next in a retail environment where store brands are gaining legitimacy.

Private Labels as Strategic Assets: How JCPenney Built Momentum

JCPenney’s private brands are not a recent experiment. The retailer introduced Marathon Hats in 1914, followed by Big Mac shirts and Penco sheets during the first half of the 20th century. What has changed is intent and scale. Today, private labels are central to JCPenney’s merchandising, marketing and product development strategies.

Several actions explain the acceleration:

• Focused investment and leadership. Executives, including CEO Michelle Wlazlo, have prioritized private brands as a way to deliver value and maintain style credibility. The company’s declared aim is to make private labels an integral part of the shopping trip rather than a hidden alternative.
• Deliberate product assortment. JCPenney carries dozens of private brands—Arizona for jeans, Home Expressions for bed and bath, Worthington for professional women's wear, Xersion for activewear—designed to cover key customer needs and price points. St. John’s Bay’s depth—tees, cable sweaters, shorts—creates repeat purchases as consumers buy new colors each season.
• Integrated marketing. Private labels feature in major campaigns such as “Yes, JCPenney” and “Really Big Deals,” and collaborative designs with celebrity stylists, including Jason Bolden, help build cultural relevance and media buzz.
• In-house supply chain and design cycles. JCPenney leans on internal design and sourcing to react faster to trends, particularly in apparel categories where fashion shifts quickly. Designers work to meet demand for timely prints and patterns—florals, stripes, polka dots—ensuring private labels feel current rather than dated.

These elements combined have produced measurable results: private-brand penetration is up substantially, and St. John’s Bay has become the retailer’s best-selling line across the entire portfolio. That performance matters not only for topline sales but for margin management: private labels typically allow retailers greater pricing control and improved profitability compared with national brands.

Why St. John’s Bay and Liz Claiborne Resonate with Shoppers

St. John’s Bay’s performance reflects a broader consumer recalibration: shoppers will buy private labels when those products deliver on fit, design and perceived quality. JCPenney’s approach with St. John’s Bay and Liz Claiborne illustrates three practical lessons.

1. Deep assortments breed loyalty. St. John’s Bay’s strength comes from breadth and repeatability. Customers return for reliable staples—T-shirts, sweaters and shorts—often buying new colors of familiar styles. When a brand consistently hits fit and value points, it becomes a convenient go-to rather than a one-off purchase.
2. Cross-demographic appeal. JCPenney positions certain brands to reach varied age groups—adults, teens and children—so private labels function as family-friendly solutions. Liz Claiborne, available across apparel, shoes and handbags, taps professional and lifestyle needs for women, making it a major women’s brand for the retailer.
3. Price plus perception. Price remains a decisive factor—St. John’s Bay T-shirts selling for roughly $12 signal clear value—but perception has evolved. Retailers are investing in design, materials and marketing to ensure private labels maintain a sense of style and quality. Customers increasingly view these lines as legitimate alternatives to national brands, not only cheaper substitutes.

This mix of assortment depth, demographic reach and improved quality turns private labels into brands with equity. That’s why JCPenney has featured private lines in national advertising and celebrated brand milestones—such as Liz Claiborne’s 50th anniversary—with exclusive capsule collections.

Merchandising Strategy: Mixing Private and National Brands on the Salesfloor

A distinctive element of JCPenney’s execution is how it merchandises private and national labels together. Rather than segregating private labels on distinct fixtures or “value” sections, JCPenney places them alongside name brands. That visual parity achieves several outcomes:

• Legitimacy by association. When a private brand sits next to Levi’s or Nike, it benefits from implied quality comparison and becomes a direct option for shoppers evaluating style, fit and price.
• Cross-selling and mix-and-match. Customers can pair private-label basics with national-brand statement pieces, which increases basket size and creates a more compelling outfit discovery experience.
• Competitive pricing context. Placing private brands alongside national brands highlights value differences while enabling customers to select based on preference rather than price alone.

Physical examples include the Stonebriar Centre store in Frisco, Texas, where men’s Levi’s sit beside the private Mutual Weave line, and Xersion is merchandised near Nike, Adidas and Puma. Such adjacency drives awareness and normalizes private-label ownership as part of a full wardrobe.

This approach aligns merchandising with behavioral economics: shoppers often decide within moments of seeing options; proximity and presentation alter perceived choice architecture. Retailers that thoughtfully integrate private labels reduce the stigma of “store brand” and position owned labels as first-class options.

The Economics: Why Private Labels Improve Retail Margins and Control

Private labels matter financially. They typically deliver higher gross margins than national brands for several reasons:

• Elimination of brand royalty costs and lower wholesale pricing.
• Greater control over production and sourcing, enabling cost efficiencies.
• Price flexibility: retailers can optimize promotions and price points to protect margin or drive volume.
• Inventory and assortment control: owning the brand allows tighter alignment between supply and seasonal demand.

Those economic advantages are attractive for retailers in turnaround mode. JCPenney has been explicit about funneling investment back into the business; private labels play into margin expansion and improved inventory turns. The retailer’s 2023 plan to reinvest $1 billion back into operations by fiscal 2025 and later corporate moves—such as merging with Sparc Group to form Catalyst Brands—underscore a strategic push to build brand-owned assets.

Control over supply chains also accelerates trend responsiveness. When designers and sourcing are in-house, retailers can shorten lead times, test assortments and pivot SKUs more quickly than when negotiating with national suppliers. That agility proves critical in apparel, where fashion cycles are compressed and consumer preferences shift rapidly.

Upgrading Private Labels: Retailers Reinvesting in Design and Packaging

Retailers beyond JCPenney are upgrading their private labels, treating them as strategic investments rather than mere margin plays. Several notable examples:

• Aldi revamped its private-label packaging and presentation to create premium perception for everyday groceries.
• Walmart redesigned its Great Value brand to modernize packaging and reinforce quality cues.
• Macy’s introduced four new private-label brands in 2025 as part of a broader overhaul to diversify offerings and appeal to different customer segments.
• Anthropologie’s owned brands constituted 71% of its business by mid-2025; its Maeve brand proved strong enough to merit a standalone store.

These moves reflect a broader industry recognition: private labels can capture customer loyalty and defend against price-based competition. Investment takes many forms—packaging redesign, material quality upgrades, fresher photography, celebrity collaborations and even standalone brand experiences.

Retailers are also experimenting with multi-tier private-label strategies: value-focused lines, mid-market “everyday” brands and premium private brands designed to compete directly with national premium labels. That tiering enables retailers to meet diverse shopper needs under one umbrella while retaining the economic benefits of ownership.

Consumer Attitudes: What the Data Shows About Store Brand Acceptance

Consumer acceptance of private labels has evolved dramatically. Gartner’s 2025 survey, cited by JCPenney executives, shows a clear shift:

• 77% of respondents said store brands can be just as good as, if not better than, name brands in quality.
• 52% said they would prefer to buy a retailer’s premium or private-label brand over a similarly priced name-brand product.
• In apparel specifically, 20% of respondents reported buying more store brands when purchasing clothing, and another 40% said they mix store brands and name brands.

These figures indicate two phenomena. First, quality perceptions have improved enough that store brands are now credible competitors. Second, shoppers are pragmatic: they choose store brands for product categories where branding matters less and reserve premium-name purchases for items where brand identity carries personal or social value.

Kassi Socha, senior director analyst at Gartner, encapsulated the shift succinctly: private-label brands are attractive goods, not just economy-tier commodities. Retailers that invest in design and quality are reaping the benefit.

Apparel as the Key Battleground

Apparel is a particularly fertile ground for private-label growth. Clothing categories often depend less on aspirational branding than on fit, price and convenience—traits that private labels can own when executed well. For JCPenney, apparel private brands perform across age groups and body types, with notable momentum in petite and plus-size categories.

Several dynamics make apparel attractive for private-label expansion:

• Repeatable categories. Basics like tees, sweaters and denim generate steady, repeat purchases and benefit from loyalty when fit and quality are consistent.
• Seasonal rotation. Apparel allows retailers to introduce fresh assortments each season, encouraging repeat store visits and minimizing long-tail markdowns through timely product cycles.
• Size and assortment control. Private brands allow retailers to curate fits and size ranges tailored to their core customer base, including underserved segments like petites and plus sizes.
• Margin upside. Apparel often carries higher markups than commodities, and private labels capture a greater share of that upside.

Anthropologie’s experience—71% of business from owned brands—illustrates how effectively executed private apparel brands can dominate sales mix. Retailers that control design, fit and production can target underserved niches and build brand affinity.

Supply Chain: Speed, Cost Control and Risk Management

A critical advantage for JCPenney and other retailers building private labels is supply-chain ownership. In-house sourcing and closer partnerships with manufacturers enable faster reaction to demand and better cost control. For apparel, this translates to shorter design-to-shelf cycles and the ability to restock high-velocity SKUs quickly.

However, supply-chain control carries risks. Concentrating sourcing strategies can create vendor dependency or exposure to geopolitical manufacturing disruptions. Retailers must balance speed and cost with resilience: diversification of suppliers, near-shoring where feasible, and inventory buffers remain important. Private-label success hinges on operational discipline—forecasting, quality control and logistics execution—because a failed season of private apparel can create excess markdown pressure and damage brand trust.

JCPenney’s approach has emphasized in-house design teams and aligned sourcing to sustain a rapid cadence of trend-driven assortments—an operational posture that supports private-brand relevance while managing cost.

Marketing Private Labels: From Value Messaging to Storytelling

Private labels require marketing beyond price promotions. JCPenney’s strategy includes brand storytelling and collaborations that build cultural credibility. Examples include:

• Celebrity partnerships. Collaboration with stylists like Jason Bolden elevates private-label visibility and signals style authority.
• Anniversary capsules. Celebrating the 50th anniversary of Liz Claiborne with exclusive collections blends heritage storytelling with contemporary relevance.
• Integrated campaigns. Placing private brands in national ad spots positions them as flagship offerings rather than incidental merchandise.

Marketing must address two tasks simultaneously: communicate value and cultivate brand personality. Successful private labels do both—positioning price as an advantage but also articulating a clear aesthetic or lifestyle proposition. When stores treat private brands as full-fledged labels with photography, social content and influencer engagement, consumer perceptions shift from “store brand” to “brand.”

Competitive Responses: What Rivals Are Doing

Competitors are not standing still. Retailers are taking different approaches to private-label strategies based on their customer base and channel mix:

• Discount grocers and supermarkets, such as Aldi, have prioritized packaging and product quality to make private labels synonymous with quality staples.
• Mass merchants like Walmart refreshed flagship private brands (Great Value) to modernize visual identity and product formulations.
• Department stores and specialty retailers, including Macy’s and Anthropologie, are expanding private assortments to gain share in core categories and cultivate loyal customer segments.
• Big-box and membership retailers, notably Costco with its Kirkland Signature line, have long demonstrated how private labels can foster brand loyalty through perceived quality.

These examples show a continuum: some retailers use private labels primarily to reduce reliance on national brands and increase margin; others aim to build private-label brands that command affinity and willingness to pay. The common thread is increasing investment in private-label branding and product quality.

Risks and Limitations of a Private-Label-First Strategy

Emphasizing private labels yields benefits but also carries risks that retailers must manage:

• Brand dilution. Excessive focus on price or commoditized assortments can erode brand perception. Private labels should enhance—not replace—the broader brand promise.
• Supplier concentration. Over-dependence on a few factories risks disruption. Supply-chain diversification and contingency planning are essential.
• Competitive retaliation. National brands may respond with exclusive collaborations, pricing strategies, or enhanced marketing to reclaim shelf space.
• Consumer elasticity. If economic pressure eases, some shoppers may revert to name brands for aspirational categories, reducing private-label stickiness.
• Quality missteps. Private brands that fail on fit, durability or material quality can damage customer trust rapidly.

JCPenney and other retailers must balance private-label growth with careful brand stewardship, ensuring private labels remain attractive without undermining the appeal of curated national brands.

Where Private Labels Excel—and Where They Don’t

Private labels perform best in categories defined by functional attributes, repeatable purchases and limited need for status signaling. These include groceries, household essentials, basic apparel and everyday footwear. They tend to struggle where brand identity drives purchase decisions—luxury goods, high-fashion items, and certain technology categories where name recognition and perceived quality dominate.

Retailers that succeed with private labels identify category-specific dynamics and allocate investment accordingly. For example, JCPenney’s emphasis on apparel basics and size-inclusive assortments plays to its core competency: offering reliable wardrobe staples at accessible prices. In contrast, its merchandising of high-fashion or niche luxury pieces continues to rely on national brands and designer collaborations.

Real-World Comparisons: What Works Elsewhere

Several retail examples illustrate distinct private-label strategies that complement the JCPenney approach:

• Costco’s Kirkland Signature demonstrates the power of quality-driven private labels. Kirkland spans groceries, household items and apparel, often competing head-to-head with national brands while delivering consistent quality and value.
• Target’s private brands, including Goodfellow & Co. (menswear), Threshold (home) and Good & Gather (grocery), show how coherent brand architecture can cover multiple lifestyle categories while maintaining a design-forward image.
• AmazonBasics exemplifies scale and price efficiency in electronics and home goods, offering functional, well-priced alternatives to established brands.
• Anthropologie’s Maeve and other owned brands reveal how private labels can dominate a retailer’s business when aligned with a clear aesthetic, producing customer loyalty and even standalone retail opportunities.

Each example underscores that private labels succeed when they match consumer expectations for quality and deliver distinctive value propositions—be it design, price, or convenience.

Implications for Shoppers and Competitors

For shoppers, the rise of private labels means more options at different price points and better value without significant sacrifices in quality. Apparel shoppers can expect better-fitting basics, more size-inclusive offerings and trend-aware designs at lower prices. The increased presence of private labels also encourages retailers to sharpen their value narratives across both owned and national brands.

Competitors must respond strategically. National brands will need to justify price premiums through product innovation, unique materials, sustainability claims, or brand storytelling. Retailers will decide whether to strengthen private-label investments or differentiate through exclusive brand partnerships and superior in-store or digital experiences.

The net effect is greater choice and heightened competition. Shoppers gain bargaining power; retailers and brands must earn loyalty through product performance and brand relevance.

What to Watch Next

Several trends will determine whether private labels continue their current trajectory:

• Continued investment in product design and quality. Retailers that treat private labels as true brands rather than low-cost alternatives will win long-term share.
• Omnichannel integration. Private-label brand experiences—online imagery, product reviews, in-store presentation—need to be seamless to build trust, particularly for apparel where fit and material matter.
• Supply-chain resilience. Diversified sourcing and near-shoring will reduce disruption risk and support faster restocking for high-demand SKUs.
• Size inclusivity and niche targeting. Retailers that serve underserved size segments or demographic niches with private labels can secure loyal customer bases.
• Sustainability claims. As consumers scrutinize sourcing and materials, private labels with transparent sustainability credentials will stand out.
• Data-driven personalization. Retailers can use purchase and browsing data to tune private-label assortments and rapidly test new offerings.

For JCPenney, these dynamics mean private labels will remain central to its strategy—if the company continues to invest in design, marketing and operational capability.

Lessons for Retailers Building Private Brands

Retailers pursuing private-label growth can draw practical lessons from JCPenney’s playbook:

• Invest in design and storytelling. Private labels need identity and voice to resonate beyond price.
• Merchandise strategically. Placing private brands alongside national labels signals parity and encourages choice-based purchasing.
• Optimize supply-chain speed. Shorter design-to-shelf cycles keep private labels relevant in fast-moving categories like apparel.
• Target size and fit gaps. Serving petite and plus-size shoppers with well-fitting private-label assortments builds loyalty.
• Use marketing to elevate perception. Collaborations, anniversary collections and integrated campaigns create cultural relevance.
• Balance assortment depth with clarity. Deep assortments support repeat purchases but must be curated to avoid inventory bloat.

When executed with discipline, private labels can generate margin, loyalty and differentiation—key ingredients for retail recovery and growth.

The Bigger Picture: Private Labels and the Retail Ecosystem

The ascendance of private labels at JCPenney is part of a larger realignment in retail. Shoppers prioritize value differently across categories: they will buy private labels for everyday apparel and staples, preserve discretionary spending for categories where brand matters, and mix choices across price tiers. Retailers that offer a coherent mix of private and national brands—presented with clear merchandising logic and consistent quality—stand to benefit.

Private labels also change retailer-supplier dynamics. National brands must negotiate shelf presence against in-house lines; retailers gain bargaining power but also the responsibility to steward their own brands carefully to avoid long-term dilution or quality slippage.

Ultimately, the shift is not simply about lower prices. It is about translating private-label ownership into authentic brand equity—something JCPenney is pursuing by combining assortment depth, design investment and integrated marketing.

FAQ

Q: Why are private labels growing at JCPenney? A: Private labels have grown due to targeted investment in design and supply chain, increased consumer price sensitivity, and strategic merchandising that places private and national brands side-by-side. These factors improved private-label credibility and drove repeat purchases, particularly in apparel and size-inclusive assortments.

Q: How significant are private labels to JCPenney’s sales? A: Private brands represent more than 50% of JCPenney’s total business, with private-brand penetration increasing by about five percentage points since 2019. St. John’s Bay is currently JCPenney’s top-selling brand.

Q: Are private labels just cheaper alternatives? A: No. While price is a key advantage, modern private labels often invest in design, materials and marketing. Shoppers increasingly view store brands as quality alternatives rather than merely lower-cost substitutes.

Q: Which private brands at JCPenney perform best? A: St. John’s Bay leads overall sales. Other prominent private labels include Liz Claiborne for women’s apparel and accessories, Arizona for jeans, Home Expressions for home goods, Worthington for professional wear, and Xersion for activewear.

Q: How do private labels affect national brands in stores? A: Private labels increase competition for shelf space and consumer attention. Retailers often position private and national brands together to allow customers to compare directly. National brands must emphasize innovation, unique features or brand equity to defend premium positioning.

Q: Are private labels profitable for retailers? A: Private labels typically offer higher gross margins due to controlled production costs, elimination of royalties, and pricing flexibility. However, profitability depends on execution—product quality, inventory management and marketing all influence outcomes.

Q: What categories are most suitable for private labels? A: Categories with functional purchase drivers and repeatability—such as groceries, household goods, basics in apparel and some home categories—are well-suited for private-label success. Luxury, prestige-driven categories remain more dependent on established brand names.

Q: How should consumers decide between private and national brands? A: Consider product category, price sensitivity and the importance of brand features. For everyday basics—tees, socks, bedding—private labels often offer comparable quality at better value. For items where brand identity, performance specs or status matter, national brands may still offer tangible benefits.

Q: Will private labels continue to grow? A: Trends indicate sustained momentum: retailers are investing in private labels, and consumer attitudes show growing acceptance. Continued growth will hinge on retailers’ ability to maintain quality, innovate in design and align supply chains for fast response.

Q: What should investors and competitors watch for? A: Monitor private-label penetration rates, assortments in apparel and home categories, marketing spend behind private brands, and supply-chain investments. Changes in consumer spending power, material costs and supply-chain disruptions will also influence private-label performance.