J.C. Penney decides to bring back sales
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 reversal comes on the eve of the one-year anniversary of its original vow 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 net losses. After losing more than half of its value, Penney’s 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 the latest moves are not a “deviation” from his strategy but rather an “evolution.”