J.C. Penney adds sales
NEW YORK -- J.C. Penney is bringing back sales.
The struggling department store chain this week will begin adding back some of the hundreds of sales it ditched last year in hopes of luring shoppers who were turned off when the discounts disappeared, CEO Ron Johnson told The Associated Press.
Penney also plans to add price tags or signs for more than half of its merchandise to show customers how much they're saving by shopping at the chain -- a strategy used by a few other retailers. For store branded items such as Arizona, Penney will show comparison prices from competitors.
The moves are a reversal for Penney on the eve of the one-year anniversary when it vowed to almost completely get rid of the sales that Americans covet but that cut into a store's profits. The idea was to offer everyday low prices that customers could count on rather than the nearly 600 fleeting discounts, coupons and sales it once offered.
The bold plan has been closely watched by others in the retail industry, which commonly offers deep discounts to draw shoppers. But so far the experiment has served as a cautionary tale of how difficult it is to change shoppers' habits: Penney next month is expected to report its fourth consecutive quarter of big sales drops and profit losses. After losing more than half of its value, Penney stock is trading at about $19. And the company's credit ratings are in junk status.
Johnson, who rolled out the pricing plan shortly after taking the top job in November 2011, told The Associated Press that the latest moves are not a "deviation" from his strategy but rather an "evolution."
"Our sales have gone backward a little more than we expected, but that doesn't change the vision or the strategy," says Johnson, who previously masterminded Apple Inc.'s retail stores and Target Corp.'s cheap chic fashion strategy. "We made changes and we learned an incredible amount. That is what's informing our tactics as we go forward."
The pricing strategy has been a key part of Johnson's plan to reinvent Penney, which had failed to change with the times as its competitors updated their stores to make them cool places to shop. The plan includes adding hip new brands such as Joe Fresh and replacing racks of clothing with small shops-within-stores by 2015. But this isn't the first time the pricing strategy has been tweaked.