JC Penney's surprise July 4 sale
The struggling retailer has reversed its decision to avoid sales promotions.
Department store chain JC Penney (JCP) is planning a July 4 price rollback -- an oddly discordant move for a company that claims promotions don't work.
The news is surprising because CEO Ron Johnson embarked on a new pricing strategy after joining the company in November. Johnson had planned to avoid sales, instead focusing on consistently low prices.
Post continues below.
Benzinga reported on June 19 that JC Penney's President, Michael Francis, was leaving the company after failing to successfully redefine the brand. The company gave no reason for Francis' departure, though Johnson said in a statement, "We thank Michael for his hard work at JC Penney and wish him the best in his future endeavors."
The news has come as a surprise to many analysts, some of whom have characterized Francis as the fall guy. But when Johnson made the move from Apple (AAPL) to JC Penney (a career choice that was a surprise to many), he was determined to reverse the company's fortunes.
Some investors in JC Penney may have been alarmed by the recent drop in revenue. Johnson's "no sales" strategy has frequently been cited as the culprit -- JC Penney's customers are used to coupons and the comforting feeling of big sales.
In May, JC Penney announced disappointing first-quarter results. Following that report, Johnson made it clear that he would work to better explain the new pricing strategy.
According to the New York Post, JC Penney is relaxing that strategy. The company emailed customers with thousands of surprise discounts.
The NY Post quoted Deutsche Bank analyst Charles Grom, who said in a note to clients, "We believe JCPenney is adding today's event to help draw traffic ahead of the holiday week."
It remains to be seen if JC Penney is abandoning the no sales policy completely, or if these July 4 discounts are a singular event.
More from Benzinga
- Trading Ideas for a Nike Rebound
- Wal-Mart Returns Over 88,000 Percent
- Barclays CEO Follows Chairman Out the Door
JC Penney's issue is not their marketing or pricing strategy. I will agree that the "low prices" didn't really meet my expectations, and in some departments, seem to have actually gone up, but I am a huge fan of the one per month catalog and ban on constant "sales"! I hated getting all those coupons in the mail and inevitably missing the sale or expiration day, or worse, getting the 50% flyer the day AFTER I bought an item. Keep your prices steady! The real problem is that the quality of JC Penney clothing plummetted when the new pricing strategy came out. I was a devout customer until about 6 months ago and now I won't even bother to go into the store. Clothing stretches out of shape, items aren't 'finished' and quickly deteriorate. I would much rather go to a better quality store the first time and have one item that will last.
Too bad, JC Penney, you had a great marketing strategy, but your products didn't have it where it counts! It's going to take a lot more than a holiday sale to get me back in this store again!
I hated the constant firewood starter mail that Penny's was always sending... people are soo damn ignorant.... retailers will over price stuff just to make you think when they have a sale, you are getting a great deal....In reality you were screwed, what is the real value of what you are paying for... When it was the wait for the sale days, you were screwed if you were in need of something right now.....
I love their new price point systems.... Now I can walk in anytime, buy something, and know that I am not getting screwed.... I am actually paying a reasonable price and getting value for my money.....
The last thought, if they are putting crap on the shelf, I can get crap at Kmart and walmart.... so back to pricing... and crap... I will not buy crap... I don't care where it is at.... Sale or no sale... if it's crap,,, if it's a duck, walks like a duck, and quacks like a duck, then it's a duck.... same can be said for crap... if it looks like it, smells like it, and sticks to your shoes like it, it's crap....
JC Penney's quality and selection has been very disappointing since the change.
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The offering could become the second-biggest this year if underwriters exercise an option to buy more shares.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.