Ailing department store J.C. Penney (NYSE:JCP) is reportedly nearing the completion of its new pricing scheme that involves discounting merchandise on its own products.
The Plano, Texas-based retailer began rolling out the new discounting strategy earlier this month and expects to finish changing the price tags on merchandise within the next few weeks, a spokesperson told Reuters.
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“We now understand that customers are motivated by promotions and prefer to receive discounts through sales and coupons applied at the register,” she said in the report. The company did not immediately respond to FOX Business for this story.
It's a move the retailer hopes will revive sales and improve its profit margin after its “no sales” policy flunked last year. The change comes amid widening criticism regarding Penney’s lengthy overhaul. Its shares have plummeted 24% since the beginning of this year amid disappointing earnings that included a 31% decline in same-store sales.
CEO Ron Johnson, who has turnaround experience at both Target (NYSE:TGT) and Apple (NASDAQ:AAPL), has admitted the “everyday low price” strategy was a mistake.
He announced plans earlier this year to resume discounting on Penney's private brands, including St. John's Bay, jcp and Arizona.
To put the new strategy in perspective, the spokesperson told Reuters that an Arizona crewneck t-shirt that would have been $5 under its “everyday” low price scheme will now have an initial price tag of $6, allowing Penney to markdown the item, essentially declaring a sale.