What the business is
J.C. Penney is a US department-store chain; Bombfell is a New York clothing-subscription startup founded in 2011.
The bet
A stylist-curated subscription box, run by a partner, could win men's customers and recurring revenue for a department store.
How it started
In December 2017 Penney announced a partnership with Bombfell: customers got five stylist-picked items to try on at home, with seven days to decide what to keep.
What happened
Bombfell handled logistics. The service, marketed to big and tall men, was Penney's only subscription offering. In February 2019 Penney also announced it would stop selling major appliances and revamp stores around apparel.
How it ended up
Penney said it would end the service on Friday 1 March 2019; current subscribers could order through 28 February. Both companies confirmed the end but declined to elaborate.
What has to be true
Penney's turnaround under Soltau prioritised profitable apparel and cutting peripheral lines
Subscription models carry high marketing costs and cancellation rates when returns frustrate customers, analysts told CNBC
An analyst said neither Penney nor Bombfell had the scale to expand the partnership
Penney's customers favoured in-store shopping over online purchases
What can be applied
Subscriptions can give retailers guaranteed revenue and data, but high marketing costs and return-related cancellations hurt, and a partner box rarely fixes a core turnaround.
Aftermath
As of 27 February 2019 the Bombfell service had a closing date of 1 March, and Penney's financial state remained weak: a negative interest coverage ratio in most of the past seven years and a share price of $1.25.
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