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J.C. Penney sees risk of "prolonged" sales slide
March 28 |
March 28 (Reuters) - J.C. Penney Co Inc said its brand new pricing strategy could hurt sales for some time and there was no guarantee its store and merchandise revamp announced in January would work.
J.C. Penney did away last month with its longtime strategy of marking prices up only to slash them and instead now keeps prices low from the start, with a twice monthly sales to clear out out-of-season merchandise. It is also planning to change store layout and merchandise assortment.
Analysts said in January, when the plan was unveiled, that the move could confuse long-term customers conditioned to look for discounts.
In an annual report filed on Wednesday, J.C. Penney said the new pricing strategy "could result in a prolonged decline in sales" and that there is "no assurance" its new strategies will lead to better results.
Sales at J.C. Penney stores open at least a year rose 0.2 percent last fiscal year, compared with a 2.5 percent increase a year earlier. They rose 5.3 percent at Macy's Inc.
In February, CEO Ron Johnson said sales were down for the month up to that point.
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