| NEW YORK, March 27
NEW YORK, March 27 J.C. Penney Co Inc
said it had resumed a marketing strategy of raising prices and
then discounting them on its own brands in a move to protect
profit margins and win back the bargain-conscious shoppers it
lost last year.
The U.S. retailer began changing the price tags on
merchandise earlier this month and should be done in the next
few weeks, spokeswoman Daphne Avila said in a statement emailed
to Reuters on Tuesday.
Penney's private brands include St. John's Bay, jcp,
Stafford and Arizona and generate more than half of its revenue.
"While our prices continue to represent a tremendous value
every day, we now understand that customers are motivated by
promotions and prefer to receive discounts through sales and
coupons applied at the register," Avila said.
Under the strategy, an Arizona crewneck T-shirt that had an
"everyday" price of $5 now has a $6 pricetag to allow Penney
more room to offer a markdown and arrive at the same price, the
Chief Executive Ron Johnson said in February that Penney
would resume the use of discounts and sales for items under its
own brands after the company reported a 25 percent drop in
fiscal year sales. He did not give any details.
Last year, Penney cut back on marking up prices only to mark
them down after Johnson said the tactic cheapened the brand and
only created an "illusion" of savings. The strategy is common
practice in retail and is used by Penney's rivals, including
Macy's Inc and Kohl's Corp .
Penney adopted an "everyday low price" approach, the
cornerstone of Johnson's plan to reinvigorate the 111-year-old
retailer, but the number of shoppers coming into stores fell 13
percent in the year ended Feb. 2.
Johnson has since acknowledged it was a mistake to get rid
of markdowns and coupons.
Penney will stick with the everyday low pricing approach at
in-store branded boutiques, including PVH Corp's Izod
and LVMH's Sephora, spokeswoman Avila said.