J.C. Penney bringing back store sales
Sales are back at J.C. Penney.
The struggling department store chain this week will begin adding back some of the 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.
Long Island has six J.C. Penney locations.
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 within the retail industry, which often 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 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."
"Our sales have gone backward a little more than we expected, but that doesn't change the vision or the strategy," said 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."
Critics say Johnson is backpedaling. Walter Loeb, a Manhattan-based retail consultant, said Johnson "is now realizing that he has to be more promotional to attract shoppers."
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.
Penney declined to say how many sales events it will offer, citing competitive reasons. The company said the figure will be well below the nearly 600 it used to offer.
To promote the strategy, Penney will begin launching TV, print and digital ads Wednesday. One TV ad compares a $9 polo shirt under its store brand Arizona with $19 "elsewhere."With Keiko Morris