JCPenney Announces New Price and Merchandising Policy
In November, JCPenney named former Apple and Target executive Ron Johnson its new chief executive officer. Two months later, Johnson unveiled the Plano, Texas–based department-store company’s radical new “transformation” initiative to place more emphasis on brands and less on promotional pricing at the company’s 1,100 stores.
”We are going to rethink every aspect of our business, boldly pursue change and create long-term shareholder value as we become America’s favorite store,” said Johnson at an event in New York. “Every initiative we pursue will be guided by our core value to treat customers as we would like to be treated—fair and square. Beginning Feb. 1, we will have Fair and Square Pricing, making every day a great day to shop. We will create tremendous excitement through monthly promotions that are in sync with the rhythm of our customers’ lives. And we will transform each and every JCPenney store over the next four years with a month-by-month, shop-by-shop rollout of exciting new merchandise initiatives.”
JCPenney will roll out three tiers of pricing: everyday, regular prices; “month-long values”; and “best prices,” which will be offered on the first and third Friday of every month. The best-price sales will help clear the way for new merchandise. The department store will hold 12 monthly promotional events each year featuring “even-better values,” as well as products and services “unique to the month.”
“We want customers to shop on their terms, not ours,” Johnson said. “By setting our store monthly and maintaining our best prices for an entire month, we feel confident that customers will love shopping when it is convenient for them, rather than when it is expedient for us.”
In addition, JCPenney stores will be remerchandised to include 80 to 100 brand shops in an area dubbed “Main Street,” as well as an area for services, dubbed “Town Square.”
Two recently announced deals with Martha Stewart and Nanette Lepore will serve among JCPenney’s first branded shops in its new Main Street format.
By fall, the company plans to have 30 in-store brand shops, including Izod, Liz Claiborne and The Original Arizona Jean Co.
Along with the new initiatives, JCPenney will introduce a new logo and marketing campaign, which includes new monthly books of highlighted merchandise, which will be sent directly to consumers, as well as new in-store signage. And talk-show host Ellen DeGeneres will return as the store’s “brand partner.”
“We are redefining the JCPenney brand so we become a store for all Americans by offering an experience they cannot get anywhere else,” said JCPenney President Michael Francis. “This will start by freeing consumers from the barrage of promotions and undifferentiated shopping experiences they have become used to and replacing it with something entirely fresh and new that is evident in every aspect of our store—new brands, new marketing, unique attractions and much more. Beginning on Feb. 1, our customers will see immediate changes that give a sense of how we will transform JCPenney over the next four years. It will be a breath of much-needed fresh air and give them reasons to visit JCPenney more often than ever before. Our objective is to make our customers love to shop again, and across JCPenney, we’re very excited about the changes to come.”
JCPenney’s partnership with New York–based Lepore will kick off the designer’s first teen collection, called L’amore Nanette Lepore, which will be sold exclusively at JCPenney beginning in February 2013.
Inspired by the designer’s daughter, Violet, the new brand will include dresses and casual sportswear for 13- to 19-year-old young women.
Late last year, JCPenney acquired a 16.6 percent stake in Martha Stewart Living Omnimedia for $38.5 million. The two struck a 10-year agreement to carry Martha Stewart–branded home merchandise in JCPenney stores. Martha Stewart has had a similar deal in place with Macy’s Inc. since 2007 and recently extended the agreement until 2018. On Jan. 23, Macy’s sued Martha Stewart Living, saying the new agreement with JCPenney violates the terms of the deal between Martha Stewart Living Omnimedia and Macy’s.—Alison A. Nieder
