JC Penney's surprise July 4 sale

The struggling retailer has reversed its decision to avoid sales promotions.

By Benzinga Jul 3, 2012 3:00PM

By Brett Callwood, Benzinga Staff Writer


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



92Comments
Jul 3, 2012 5:27PM
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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!

Jul 3, 2012 3:46PM
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Has Penney's considered how their new pro-gay push has effected them?  I won't shop there because I am very sick of gays being shoved in my face. 
Jul 3, 2012 11:37PM
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JC Penney was founded by a man of great integrity and believed in strong family values.  In 1998 I was so proud to be a new employee  in this great company and remember vividly standing in front of the bronze statue of Mr Penney in Legacy, Texas.  It was a special moment for me as I imagined the core values that we shared and how delighted I was to think that I could help perpetuate what Mr Penney had started.  I am now retired and very sad to see the direction that this once great company has taken.  I pray that JCP will return to the principles that made it great!     
Jul 3, 2012 4:50PM
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Mysticwerewolf has it right.  Everyday low prices would not include a toddlers dress for $45.  For some people that is over 4 hours of work for a kids dress. 
Jul 3, 2012 8:55PM
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Why any company would kick of a marketing camplaign that caters to any one group be it homosexuals, or Catholics is bound to turn someone off. Its a very unwise move. J.C. Penny lost a very large number of customers with that decision. Fair or foul its a fact.
Jul 4, 2012 2:55AM
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need to go back to the way it was. love the coupons and the sales!!!
Jul 3, 2012 6:57PM
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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....

Jul 3, 2012 7:59PM
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J.C Penny tried to sell Kim Kardassssian's Butt, but it was so huge the forklift couldn't lift it.
Jul 3, 2012 5:29PM
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I am still done with them unless the ceo pitches in all that money he took and leaves.
Jul 3, 2012 5:32PM
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Predicted the concept would not work.  Do not care if the prices of items I don't need are reduced across the board.   Have not shopped at Penney's since they changed their pricing policy.  Doubt will ever return.
Jul 4, 2012 8:35AM
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I simply included pieces of my JCP credit card in the 'monthly statement' to JCP - enuff said. 
Jul 4, 2012 8:56AM
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JC Penney's quality and selection has been very disappointing since the change.

D. Hinman

Jul 3, 2012 10:39PM
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It's all about marketing folks. Would you rather pay a higher price and be able to use a coupon or pay a everyday lower price? I'll take the lower price any day.
Jul 3, 2012 6:28PM
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   What a maroon Johnson is.  JC Penny isn't  Wal-Mart, duh!
Jul 4, 2012 10:29AM
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I go for the clearance...everywhere...Its that simple. Bring back the 25 dollar off coupon and ratchet down the prices at the end of each season...this is how I buy unless its necessities I always look in the spring and summer for good winter clothes deals and in the fall and winter for summer clothes...I like to stop into a store just by chance...... and find a deal of the century on a clearance racks sometimes...The nature of sales for any retail is the blend...If you absolutely have to have it full price...get it...otherwise make your money on the front end and start marking it down baby....thats when I buy.  JCP is stupid now...never any sales...never any markdown.  Its like going Target in bad drag-queen clothes
Jul 4, 2012 8:43AM
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First JC Penny took away the great sales and good discounts and effectively raised prices,then took away our credit line.We closed the acct and cut up the card.Good bye JC Penny.Nice way to treat a good customer.
Jul 4, 2012 2:35PM
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I,  too, was a long-time faithful shopper at JCP - but when they changed their ads and lack of incentives (coupons), not to mention eliminating the clothing lines that I buy for my work clothes - I simply stopped shopping there. Not everyone wants to look like a teenager.


Jul 4, 2012 1:20AM
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I am straight and could care less if a spokesperson is lesbian or gay.  The fact that so many of you choose that as a reason not to shop somewhere just shows how ignorant and small minded so many of us are in this country.  I feel sorry for such idiots.
Jul 4, 2012 11:45AM
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I am amazed that any company that chooses to support gay's would not have the foresight to predict an adverse effect. Generally companies do market studies for projections. There was no home work done here. The percentage of gay's is actually small but very loud and offensive. I personally would do a lot of shopping at a company that opposes gay's publically no matter what the cost. Penny's can't go back now and change their stance like obama has on the issue, so they are destined for extinction. Hopefully other companies will not follow suit after this example.
Jul 4, 2012 2:15AM
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I love to see it when the libs get their panties in a wad over the "gay" issue and start their childish name-calling.  You say foolish things about others who don't believe the same as you because it makes you feel powerful. Cowards who hide behind the computer. There are things I do not like nor will I support because I feel they are morally wrong.  I am in no way afraid of homosexuals or blacks or you little people.  And I don't care who I come into contact with on a day to day basis that is gay, but I am sick of homosexuality being flaunted and paraded and constantly put into my face.  If that's what you want to be, be it in your private time, but leave me alone.  Most of you Christian and conservative bashers are just upset because when this issue of the gay ad came up, you were all saying how it would help JCP.  Now you are angry because the masses didn't rally behind your cause. Grow up and accept that not everyone believes as you do, and has every right to do so.
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