J.C. Penney shares jump on note calling Joe Fresh 'bright spot'
March 18 (Reuters) - J.C. Penney Co Inc shares rose 7.5 percent on Monday after an Oppenheimer & Co research note flagged promising early customer response to the department store chain's weekend launch of Joe Fresh shops within its stores.
Penney, whose sales were down 25 percent last fiscal year as it eliminated most coupons and discounts, is in the midst of transforming 700 of its stores into collections of branded boutiques, including Joe Fresh, a popular Canadian apparel brand and retailer owned by Loblaw Cos Ltd.
The company has said that Joe Fresh, along with a new home- furnishings section being launched this spring, are instrumental to returning Penney to growth.
"Customers do seem to be reacting positively to the Joe Fresh launch," Oppenheimer's Brian Nagel wrote in a research note, based on visits to stores over the weekend.
Nagel praised the Joe Fresh merchandise and its pricing, and said the shops are a "bright spot" for Penney.
Separately, International Strategy and Investment Group analyst Omar Saad published a research note on Monday that highlighted the value of Penney's real estate.
If Penney, which owns 426 of its 1,100 stores, separated its 300 best locations into a real-estate investment trust (REIT) and sublet space to higher end brands and retailers, that business could be worth $40 per share, Saad wrote.
Penney shares rose $1.16, or 7.5 percent, to $16.64 in mid-morning trading. (Reporting by Phil Wahba in New York; Editing by Maureen Bavdek)
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