Last February, JC Penney decided to try out a new idea: no sales. The day to day price would be 40 percent lower than manufacturer every day. They were to have 12 month-long sales on some merchandise and periodic clearance events year-round instead of sales and coupons. This model did not work.
Johnson said Penney since has learned that people don't shop on a monthly basis, but rather they buy when they need something for say, back-to-school or during the winter holidays. And during those times, he says, they're looking for even more value. Instead they will be using the method that happens more with household appliances than anywhere else: Having the manufacturer suggested retail price and then Penney's. The sales will still be less than the 600 annual sales they used to have, according to CBS News.
To promote the strategy, Penney will start airing TV, print and digital ads. One TV ad compares a $9 polo shirt under its store brand Arizona with $19 "elsewhere." "Two polos, same color, same vibrant, same details, same swing, same swagger, different prices," the ad says.
Analysts expect a loss of 17 cents on sales of $4.22 billion for the fourth quarter. That would mean the company's annual sales shrunk by 23 percent, or nearly $4 billion, to $13.3 billion for the latest year. Revenue at stores opened at least a year are expected to drop 25 percent, in line with the third quarter, according to analyst polled by research firm FactSet.
This new move will hopefully help to increase JC Penney sales, and help them recover former customers.
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