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.
Just a year ago, J.C. Penney (JCP) had a bold marketing plan: vanquish "fake" prices and offer simplified pricing that would do without markdowns and sales.
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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I've said this for the last few years. They advertise great sales 50% and then you look at the regular price, and it's very high. My exact words while shopping to salesperson, "they mark everything up and then list as 50% off. I do not shop there anymore because of this.
Also, Herbergers has started not listing prices on certain items frames. They will have 50% off frames but the price of the frame is on it, so you only know when check out that it's much higher. So far, Kohls is still the best at honesty.
I worked at J C Penney for two years in the window department. With 20 years experience in making and installing custom drapes I was appalled at the prices and quality of their ready made curtains and valances. They are all made of cheap fabrics and terrible linings (that is if they are lined at all) I felt embarrassed to offer products I knew were of terrible quality. One sheer panel that might have cost $5.00 dollars to produce was retailed for $50-$60.00. The side hems were puckered due to being sewn with to much tension causing them to stretch and be uneven at the bottom.
Lower pricing is not going to save Penney's unless they offer quality to go with it.
JC Penney I rather shop at the dollar store then go to penneys where we can't even find a professional cashier to check us out! Is almost as if they are barely turning around and not giving there employees the proper turn around! Forget Penneys! No cashiers, No proper Price-tags No proper customer service! Now if you want to check out you have to have a credit card, what a scam! I am living penneys feels like a Dark Shadow in there! Bill Ackman Shut UP!
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