JC Penney plans big price cuts
In yet another apparent strategy shift, the retailer is reportedly looking at significant markdowns to win shoppers back.
The company is dropping the month-long special discounts that cut prices of certain items by as much as 29%, The Wall Street Journal reported. Instead, starting in August, Penney plans to cut prices permanently on a broad swath of items.
There will be just two kinds of prices: everyday low prices and clearance prices.
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Will this finally turn Penney around? The company has seen sales and profit drop amid consumer confusion about its prices. Shares are down 37% this year to just $22.14, and investors -- and shoppers -- are running out of patience.
It's been a rough road for new CEO Ron Johnson, who joined Penney to much applause after his work at Apple (AAPL) and Target (TGT). JC Penney took on some Target-like qualities after Johnson joined, offering simple, well-designed catalogs and a cleaner look. The transition is just beginning, the company says.
Johnson joined a company in trouble. It over-discounted and over-promoted to the point where shoppers were mainly waiting for the next big sale to come along before buying. In fact, nearly 75% of its products were sold at at least a 50% discount, the Journal reported. Penney could not continue that model and thrive.
Johnson responded with aggressive changes, including a three-tiered pricing structure based on everyday low prices, month-long markdowns and, on two Fridays a month, a "best price" clearance sale to get rid of inventory.
The new structure was confusing to shoppers, but Penney insisted things would turn around eventually. Meanwhile, sales began to fall sharply.
It will take years for Johnson's dream to be realized fully. He's planning major changes to inventory and the store's offerings. He is asking investors and suppliers for patience, but how long will everyone wait?
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For the love of God if they want to stay in business and make some money .....
GET SOME CLOTHES THAT LOOK GOOD AND WILL LAST!!!!!
GET RID OF THE CHEAP, UGLY STYLE, UGLY PRINTS, UGLY COLORS!!!
If they want to get people in and buy, go back to the basics with clothing that can be worn in many situations, not those low cut, pregnant looking, trashy poly blend, pieces that I would not be caught dead in.
What :Pennys fails to understand is most of their products are made in China. The items are no better than what Walmart carries. They need to QUIT SELLING ITEMS THAT ONLY LAST ONE WASH.
America is on a path that may be to late to stop. It started during the Nixon administration and the Chinese trade relationship that began from this era.
We have shipped way too many jobs overseas to increase the profitability of companies and wall street to the point where there is not enough domestic income to sustain a consumer driven economy. Adding to the fire is $3.50 per gallon gasoline (sell our domestic oil off shore to increase profits) and you have the beginning of the perfect storm.
It does not matter what company you are reviewing they are all in trouble (JCP, Sears, Best Buy, Macy's, to name a few) and they are all suffering from the same thing. Lack of customers with enough income to sustain the consumerism that built the American economic machine.
Yes all of the corporate heads are making millions (Mr. Johnson at JCP 57 million a year) but the consumer that has to live on a shrinking budget and higher cost of living simply does not have the resources to sustain economic growth.
Sale pricing, gay spokespeople, and all of the other excuses being thrown around as the reason for the problems are simply the smokescreen the media wants you the public to keep buying. Meanwhile Wall street, Corporate executives, Washington Fat Cats, Bankers, Oil Companies continue to suck the life blood out of the economy for their own benefit.
We have all been sold a bill of goods and the spiral continues. All of these retailers will go out of business because there is simply not enough income in the US to sustain the economy, and the jobs are not coming back (even though Politicians tell you that is their main objective to be elected).
Funny as they are the ones that perpitrated the problem to begin with over 40 years ago.
I don't go near Penny's since they changed everything. I used to always shop there, but the clothes and brands have changed, and it's nothing that fits right, or that I like. The sales and coupons were great before. Who was the "loser" that changed everything that worked?? Who are your buyers who think people should be wearing tight fitting disco clothes to work in a bank?
--> Stop trying to force the 20-something brands and unwearable styles on us!
BRING BACK THE OLD PENNY'S!
Like it or not, agree or disagree, a big part of their problem is that they were focused more on pushing a social agenda than on selling their products to their main customer base - families. I never saw the infamous Father's Day ad, but I know the Mother's Day catalog I received in the mail featured a lesbian couple. Ads like that may get them some applause in certain circles, but its NOT going to bring in alot of NEW customers. They had to know this. They also had to know that a large number of their already establish customers were going to greatly offended and jump ship.
It doesn't matter if you agree or disagree with their social views, the fact is that they will not recover from this mistake unless they dump the dingalings, make amends with their customer base and never agian let their political correctness trump good business sense!
My wife used to shop at our local JC Penney store all the time. Now she never goes.
Penney would send her something in the mail almost every day. Sometimes two or even three mailings in a single day. Like the article said, she always wait for the best deal before shopping.
It took Penney a long time to get to where they were and although that situation may have been untenable in the long run, Johnson should have reversed course and implemented his changes much more slowly.
Make the mailings less frequest gradually over time. Add in mailings that introduce changes and make those changes little by little. Why the big rush?
Johnson was just way too impatient. He was used to dealing with Apple fan boys who'd line up to buy a heifer if it had an Applo logo on it.
The "boutiques" within JCP stores was another mistake. Our local JCP has a Sephora store in it, right next to the men's department. I'm not going to shop for shirts when I'm nearly choking on perfume fumes.
Send me the sale catalogs, put a coupon in it and I will start shopping there again. I've bought all my curtains and bedding there for over 30 years. Put it back the way it was. If it ain't broke don't fix it.
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The retailer labels the character's fake memoir as non-fiction. This comes weeks after it categorized the the Bible as fiction.
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