Who knew washing machines and stoves were the key to a successful Thanksgiving for a retailer?
A few weeks ago, CEO Marvin Ellison told Wall Street investors that the 500 of 1,000 Penney stores with an appliance area had comparable sales in the third quarter that were two percentage points higher than a year earlier. Ellison tells Fortune on Friday that that would grow to a 2.5 to 3-point boost in the holiday season quarter.
Though Penney is primarily known for apparel, shoes, and small home goods like pots and pans, it is looking to take advantage to mall-rival and key appliance rival Sears’ (SHLD) dwindling fortunes.
At the Penney store in Jersey City on Thanksgiving, the most prominent signage at all entrances to the store touted Black Friday deals for refrigerators and driers. The strategy is working, says Ellison, who joined Penney as president in 2014 after a long stint at Home Depot (HD) and became CEO last year. (Fortune wrote a cover story on Ellison earlier this year.)
“Because I worked in appliances for 12 years, I understood the importance of having appliances set for the Thanksgiving-Black Friday weekend and throughout the holiday season,” Ellison tells Fortune on Friday morning. “It’s just historically a very strong appliance purchase period.”
Penney has been the department store sector’s comeback story in recent years, crawling its way back from near death in 2013 when it failed to radically reinvent itself as a hipper store.
It has overhauled its e-commerce, revived popular house brands that had been jettisoned during that failed reinvention and sought to diversify its product mix to be less reliant on apparel. This holiday season, Penney doubled down on a category it doesn’t usually focus on: toys. And it’s been opening more Sephora beauty products shops within its department stores.
But like the other department store chains, without exception, Penney’s comparable sales fell last quarter, dipping a worse-than-expected 0.8%. That adds pressure on Penney to get back to its momentum during the key holiday season.
“We’re counting on appliances,” Ellison says. “The early read is it’s doing exactly what we hoped for.”