Anne d’Innocenzio has some interesting strategic news today about the New J.C. Penney (JCP), which is going to start looking a lot more like the Old J.C. Penney:
The struggling department store chain this week will begin adding some of the hundreds of sales it ditched last year in hopes of luring back shoppers who were turned off when the discounts disappeared.
Penney also plans to add new price tags or signs for more than half of its merchandise to show customers how much they’re saving by shopping at the mid-priced chain � a strategy used by a few other retailers such as home decor chain Crate and Barrel and the company that owns TJ Maxx, HomeGoods and Marshalls. For store branded items such as Arizona, Penney will show comparison prices from competitors.
This, of course, is an about-face from CEO Ron Johnson’s plan for Penney unveiled last year, part of which was to scrap sales and everyday low prices. As d’Innocenzio writes:
But so far the experiment has served as a cautionary tale of how difficult it is to change shopper’ habits: Penney next month is expected to report its fourth consecutive quarter of big sales drops and profit losses. After losing more than half of its value, Penney stock is trading at around $18. And the company’s credit ratings are in junk status.
Johnson told the AP that the new approach is an “evolution” not a “deviation” from his strategy. Which is fine as far as nit-picking goes but, given the criticism he’s received, the news suggests that Penney’s going back, at least slightly, to what it’s customers really want.
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