New CEO Reinvents JC Penney
Blog Date: 2/1/12
Blog Author: Saniya Khan, Accounting and Finance
The retail store JC Penney is planning a huge revamping of stores starting February 1st. Some of the upcoming changes include a new logo that evokes an image of the American flag as well as a simpler way of pricing merchandise, eliminating complicated coupons and sale promotions. All merchandise will be divided into a three tier system: everyday prices, monthly specials, and clearance; and stores will be offering new boutique style areas that highlight a specific brand the company is working with, for example H&M and Sephora.
This new marketing campaign is headed by the company’s new chief executive, Ron Johnson, who previously was in charge of Apple’s retail strategy, and its new president, Michael Francis, who was the former chief marketing officer for Target. The company plans on holding twelve simple sales events a year rather than the close to 600 promotions they held this past year in an effort to simply their pricing strategy for consumers and to cut back on promotional costs from over $1 billion required to advertising all the sales they held now down to spending $80 million per planned promotion.
In other cases, when a company wants to completely change their image and marketing strategy, it can take up to a year to figure out the kinks and predict potential problem areas before making the change public across stores, however, Johnson is moving fast. With initial changes rolling out the first day of February and plans to have a new layout of the retail stores by having around 100 or so boutique-style stores-within-stores and a central service center called the “town square” by the next four years, he is wasting no time. The goal is to increase traffic flow and profits by providing the best prices year-round for customers while saving the company money, but will this new strategy really work? Do consumers prefer simple once-a-month sales over the excitement of a “one-day only” sale or coupons they can use anytime to save even more? Johnson has only been with the company since the fall, but his plans are moving quickly. Now it is up to consumers to react to these changes.