1/24/2013 8:02 PM ET|
Is JC Penney faking its prices?
After taking a stand against phony pricing last year, the embattled retailer is reportedly asking suppliers to concoct 'fake' prices to make discounts look better.
But a new report says the retailer is still faking -- and this time around, it's allegedly playing the same old mind games that it disavowed.
Penney is reportedly asking some manufacturers to make up "phony suggested retail markups" for their clothing, reports the New York Post.
Then, to give shoppers the perception of hitting upon a bargain, Penney's stores reportedly tag the clothes and accessories with the chain's own lower prices, the Post reports. In one hypothetical example of how the strategy works, a table with sweaters might have a sign reading $30, but the price tags on the clothing could read $22.
One thing's for sure: J.C. Penney is under a lot of pressure.
Doubts are swirling about the company's turnaround plan, with UBS analyst Michael Binett earlier this month saying he expected same-store fourth-quarter sales to drop 28%. The company is expected to report fourth-quarter results on Feb. 27.
Penney is asking manufacturers put in writing the suggested retail prices, to ensure it can back up pricing claims, according to the Post. Penney officials didn't respond to the newspaper's requests for comment.
CEO Ron Johnson, a former Apple (AAPL) executive, has bet the retailer's turnaround on a "fair and square" pricing strategy. The company debuted splashy ads featuring Ellen DeGeneres making fun of marketing gimmicks.
So far, it appears shoppers aren't buying it.
Revenue has declined by more than 20% for three straight quarters, while the stock has slumped 47% during the past year.
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