NEW YORK – J.C. Penney Co. Inc. is doing away with deep discounts in favor of offering shoppers simpler pricing and promotions, the department store’s new chief executive said on Wednesday.
Penney will also revamp its more than 1,100 locations over the next several years. By 2015, every store in the chain will be carved up into about 100 shops within the store, featuring brands by the likes of home goods design icon Martha Stewart and fashion designer Nanette Lepore, executives said.
Penney, whose sales performance has lagged that of Macy’s Inc. and Kohl’s Corp. in recent years, has confused shoppers by focusing on discounts and promotions, CEO Ron Johnson said at an event in New York, where the chain introduced its new strategy.
“The customer knows the right price,” Johnson said. “To think you can fool a customer is kind of crazy.”
The changes are the first big push by Johnson, who became CEO in November after 11 years at Apple Inc., where he built that company’s retail chain.
Wall Street is waiting to see if the magic he led at Apple’s stores, known for their streamlined look and industry-leading sales per square foot, can be recreated in a department store chain that has lost its edge.
The company will be offering financial details in a meeting with Wall Street analysts on Thursday.
“I am betting on the jockey, not the horse. I think Ron Johnson can make it happen,” said Mervin Morris of Morris Management Company. “He has taken on a very big task.”
Shares of Penney were down 1.3 percent at $34.15 in trading on the New York Stock Exchange.