NEW YORK – J.C. Penney is changing its pricing – again.
Just six months after the midpriced department store chain got rid of the hundreds of sales it offered each year in favor of everyday lower pricing, it is reversing course.
Penney on Feb. 1 began using a three-tier pricing approach that called for consistently lower daily prices, monthlong sales and periodic discounts on merchandise throughout the year.
But starting Aug. 1, Penney will eliminate one of the monthly sales and bring back the word clearance.
Penney also plans to tweak its advertising to better communicate the pricing plan to customers.
The moves come at a time when shoppers – and investors – have voiced confusion over Penney’s pricing strategy, which was spearheaded by CEO Ron Johnson when he took the helm in November.
In May, Penney’s stock plunged nearly 20 percent in its biggest decline in four decades after the retailer posted a larger-than-expected quarterly loss and a 20 percent drop in revenue on poor reception from shoppers for its pricing strategy.
The change also calls into question how patient Main Street and Wall Street will be with Johnson, a longtime retail executive who has been lauded for being the mastermind behind the success of Apple’s retail stores and Target’s cheap-chic pricing strategy.
The pricing plan is presenting a challenge for Johnson because it’s turning out to be a tough sale to shoppers who have come to expect deep discounts and investors who are looking for Penney to turn around its business quickly.