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J.C. Penney's radical pricing change

Wednesday, January 25, 2012 - 02:11

Jan 25 - Department store retailer J.C. Penney is doing away with deep discounts, moving to an everyday low price strategy, and adding in-store shops featuring designer brands in hopes of better attracting budget-conscious trendy shoppers. Bobbi Rebell reports.

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Out with the discounts, in with the designers. At a presentation in New York City, J.C. Penney promoted its new vision- moving from close to 600 promotions per year, to just 12, focusing on lower everyday prices and getting rid of the heavy discounts they've become known for. It's a big repositioning that President Michael Francis admits will have its challenges. SOUNDBITE: MICHAEL FRANCIS, PRESIDENT, J.C.PENNEY (ENGLISH) SAYING: "It is an education challenge. With $80 million a month in marketing focus on telling that story we believe we have adequate resources to continue to retrain and to communicate our intention." Part of that will be spent on a big ad campaign promoting the simpler pricing, and mocking the company's old discounting approach. Penney is also revamping its 1,100 locations over the next few years, joining the retail trend of having specialty shops within the department store. REPORTER BRIDGE: BOBBI REBELL, REUTERS (ENGLISH) SAYING: J.C. Penney unveiled vignettes showcasing designers like Nanette Lepore, who will have an exclusive affordable line inspired by her teenage daughter. SOUNDBITE: NANETTE LEPORE, DESIGNER (ENGLISH) SAYING: "I was a little unsure about how it would be presented and all that but knowing after this presentation all the details and how it's going to work, because a lot of it I just found out myself, when they say you are going to have your own shop they really mean it. I mean that's exciting." The company will also be launching Martha Stewart products in 2013, a move that brought Stewart's company a lawsuit from rival Macy's. The plan is the brainchild of new CEO Ron Johnson- who took the helm of J.C. Penney after 11 years at Apple. Retail consultant Walter Loeb believes the strategy will work: SOUNDBITE: WALTER LOEB, PRESIDENT, LOEB ASSOCIATES (ENGLISH) SAYING: "I think bringing in a new man who has a vision is really great because now we can see a new development based on his experience at Apple. He can see new ways of talking to the customer." The new pricing and promotions go into effect February 1st. Bobbi Rebell, Reuters

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J.C. Penney's radical pricing change

Wednesday, January 25, 2012 - 02:11