Following big drops in revenues and profits following the launch of its new Fair and Square pricing strategy, J.C. Penney is now using the word sale again.
“We are moving away from the word[s] month-long value because no one really understood that,” said CEO Ron Johnson in a presentation to the Piper Jaffray Consumer Conference on June 5 in New York City. “[We are] calling it what we intend to do, which is a sale.”
J.C. Penney spokeswoman Kate A. Coultas stressed the change was mostly in how the store communicates to consumers.
“Nothing has changed except for how we’re now better communicating this in our marketing,” she said. “Our monthly promotions showcase a new sale every month with sales prices that last all month long.”
In the presentation, Johnson said the company had anticipated a fall in sales, but he maintained that consumers were gradually warming to the new model.
“We believe there will be one year of sales going down,” he said, “which will set the stage for a year of take-off.… It will take a number of years to get there.”
He said that by changing its pricing, Penney’s now had access to a greater range of brands and products.
“The brands that we had access to were highly limited because of how we promoted,” he said. “Great brands don’t want to be devalued in the marketplace.… If we didn’t change our pricing we would continue to just do no name private-label [merchandise].”
“Every houseware vendor now will sell to us because we have price integrity,” he added. “Every cookware vendor now will sell to us because we have price integrity.”