J.C. Penney News

There, they said it. “Sale.”

When J.C. Penney began 2012 with a new strategy, CEO Ron Johnson vowed the department store chain was finished with coupons and sales. From now on, it would be “fair and square pricing,” which was a three-tiered system of prices.

Johnson said customers wouldn't be hearing the word “sale” again. Instead, the company would call these events “month-long values.”

Customers posting on ConsumerAffairs didn't like it and apparently, enough others didn't like it either. Penney's sales plunged in the first quarter of the year. This week Johnson told a Piper Jaffray investors conference that it failed to effectively communicate with its customers so the word “sale” is returning to its advertising.

Consumers like Amanda, of Tao Baja, Puerto Rico, are saying “told you so.”

“Since the new CEO changed the strategy to Fair and Square, we have practically stopped shopping,” Amanda wrote in a ConsumerAffairs post. “The store is mostly empty, there are no good sales and I know many people have drifted to Macys instead.”

And Amanda says she is not at all surprised to see the company changing course again.

“Of course,” she wrote. “The coupons and sales were excellent motivators and I know that the stores sold more this way than the way it is now.”

But Penney's isn't abandoning all its changes. Johnson says in August the chain will start remodeling stores that will be turned into a number of separate shops. And Johnson said the new pricing policy actually helped draw in more vendors that will draw in new customers over time.

Change doesn't appear to be going over very well at J.C. Penney. The nation's fourth-largest retailer reports it lost $163 million in its fiscal first quarter of 2012, compared to a profit of $64 million in last year's first quarter.

The loss, which Penney's blames on falling sales, was so significant the company announced it was discontinuing its quarterly dividend.

There are plenty of consumers who might be saying “I told you so.” Penney's new CEO Ron Johnson initiated sweeping changes at the chain at the beginning of the year, rubbing many long-time customers the wrong way.

Johnson did away with Penney's discounts, coupons and sales and instead, initiated a “three tier pricing system.” Marilyn, of Hot Springs, S.D., says the result seems to be higher prices now at Penney's.

“I bought an Alfred Dunner blouse at Herbergers today for $18.20,” Marilyn wrote in a post at ConsumerAffairs. “I priced the exact same blouse at JCP and it was $40. I use to shop Penney's for Alfred Dunner but will no longer shop there.”

Turn-off

Sue, of Wilmington, N.C., says she was a long-time Penney's customer turned off by the changes

“Went through our Penney's a couple weeks ago after staying away awhile to recover from being shell-shocked by the commercials,” Sue wrote. “I've shopped Penney's for years! I was amazed to see a bustling well stocked and appealing local store morph into a dead-end! Didn't like the changes in merchandise, pricing or displays. I quickly walked through to get to another store. I have not been back!”

Even Penney's advertising campaigns have become a source of irritation for some shoppers. Pat, of Mountain City, Tenn., wrote to ConsumerAffairs about Penney's President's Day campaign back in February.

Annoying commercials

“I was annoyed by the screaming women commercial but I did not complain about it,” Pat wrote. “Their current commercial, however, should not be allowed on television. I am very offended to see a child dressed as Abraham Lincoln dancing around and grabbing his crotch. This type of child exploitation should be against the law. If this is the kind of thing that J.C. Penney is promoting, I certainly will not go into their stores.”

While Penney's may hope to eventually attract a new breed of shopper to its stores, it's losing Sue, Pat and Marilyn in the process. They, along with like-minded customers, are likely responsible for the sea of red ink.

Wall Street punished Penney's with a 14 percent one-day sell off in its stock, but most analysts say they still expect Johnson to turn things around, with a newly announced plan to cut costs by $175 million.

The financial media is focusing new attention on the changes at retailer J.C. Penney, pointing out that consumers appear to be resisting them.

Business Week reports J.C. Penney has taken a big hit in revenue, a result it says of the company's new pricing policy.

In an article headlined “Most Customers Don't Have A Clue About J.C. Penney's New Pricing Plan,” Forbes cites a survey showing 67 percent of shoppers said they did not know about changes to Penney's pricing policies.

Many of the consumers who do know about it don't seem all that impressed. Jeannette, of Enfield, N.C., doesn't mince words.

Hates it

“I hate the new pricing that J.C. Penney recently implemented,” Jeannette wrote in a post at ConsumerAffairs. “All of my coworkers, family and friends feel the same way. I hope the CEO or whoever that made these changes will change things back to the way they were or at least improve the pricing! I predict that many stores especially in my small community area will be closing if something does not change. Listen to your customers!”

New J.C. Penney CEO Rob Johnson instituted the changes in February, doing away with sales and coupons and going to what he called a three-tiered pricing system. Wanda, of Panama City, Fla., said she used to be a regular Penney's shopper until the changes went into effect in February. But over the over the weekend, she says she and her husband decided to see what had changed at their local store.

Prices are higher

“This was the first time my husband had been in the store since the change,” Wanda wrote. “He has always liked to shop for his clothes here and he also was in shock. We purchased three polos for him which costs us $60 plus. In the old days those same shirts would have cost us at least $20 less with our 'coupon' savings and 'rewards' we would received by doing the survey on the back of our receipt. St Johns Bay polos use to be around $10-$15 when on sale....now a SJB polos regular everyday price is $20. How is that fair and square?”

Candy, of Morgantown, WVa., says she also hates the new pricing, and is additionally upset that Penney's has discontinued its catalog.

“I believe the changes have made it clear that J.C. Penney no longer wants any money from senior citizens,” Candy wrote. “Senior citizens needed the catalogs and were good customers. Senior citizens needed the coupon sales to save due to fixed incomes.”

The arrival of Johnson at Penney's from his former position at Apple was cause for widespread optimism about Penney's on Wall Street. But now it appears that some of that optimism is fading. Forbes cites a report from a Citi analyst predicting J.C. Penney's sales will fall by $1.2 billion in 2012. Bloomberg reports Johnson, meanwhile, earned $53 million in compensation from Penney's last year.

While consumers like Jeannette, Wanda and Candy don't feel they are benefiting from Penney's make-over, Forbes sees some possible winners – Walmart, Target and Khol's.

J.C. Penney has refused to fire Ellen DeGeneres as its spokesperson, turning aside demands from an anti-gay hate group, OneMillionMoms.com, which objected to the choice of Ms. DeGeneres.

In an emailed statement yesterday, J.C. Penney said it "stands behind its partnership with Ellen DeGeneres.”

“This week Americans spoke out in overwhelming support of LGBT people and J.C. Penney’s decision not to fire Ellen simply for who she happens to love,” said Herndon Graddick, Senior Director of Programs and Communications at GLAAD, a lesbian, gay, bisexual and transgender (LGBT) media advocacy and anti-defamation organization.

A ConsumerAffairs.com sentiment analysis of about 200,000 consumer comments on social media confirmed DeGeneres' popularity, with a net positive sentiment in the 70%-90% range over the last year.

“But while Ellen has the nation on her side, in 29 states today, Americans can still be legally fired just for being gay," Graddick said. "Our elected officials should use this incident as yet another example of the support for legal protections for all hard working employees.”

Today, Americans can be fired in 29 states because of their sexual orientation, and in 34 states because of their gender identity.

Anti-gay group

OneMillionMoms.com is a project of the American Family Association, which has been designated as a hate group by the Southern Poverty Law Center (SPLC).

"Degeneres is not a true representation of the type of families who shop at the retailer. The small percentage of customers they are attempting to satisfy will not offset their loss in sales by offending the majority," the group said on its Web site. "Funny that JC Penney thinks hiring an open homosexual spokesperson will help their business when most of its customers are traditional families."

A poll on the Los Angeles Times site shows 94% of readers polled agree that DeGeners should not only maintain her post as J.C. Penney’s spokesperson, but call her “a symbol of equality.”

"Ellen DeGeneres is one of the most fun and vibrant people in entertainment today, with great warmth and a down-to-earth attitude. The millions who watch her on television and follow her through social media relate to her and trust what she has to say," said Michael Francis, president of J. C. Penney Company, Inc., as he announced her appointment last week.

"Importantly, we share the same fundamental values as Ellen," Francis said. "We couldn't think of a better partner to help us put the fun back into the retail experience."

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Sentiment analysis by NetBase

J.C. Penney's new TV advertising campaign, heralding its new discount pricing policy, is rubbing a lot of consumers the wrong way.

Since late last week, shortly after the commercials began airing, ConsumerAffairs.com has received dozens of complaints, mostly from women, registering strong, negative reactions. The barrage of complaints began last Friday.

"This is the worst ad of all time, stop it immediately," wrote Kathy, of Hillsboro, Ore. "We will boycott J.C. Penney until it offers an apology to all its customers!"

Obnoxious

"I am complaining about the obnoxious television commercial aired announcing your new pricing campaign," wrote Carole, of Lakewood, Calif. "It has to be one of the most irritating, annoying commercials ever created for television. If you think this will make anyone shop at your stores, you are mistaken as far as I'm concerned. I can't imagine anyone thinking this is good advertising. Remove it as soon as possible. IT IS ANNOYING!"

The 30-second spot contains no dialogue, only female consumers screaming when they see signs and advertisements announcing the store's supposed steep price reductions. It's not clear what that's supposed to represent, although it may be that the screaming women represent consumers who shop at J.C. Penney competitors. You can see the ad for yourself below and draw your own conclusions.

It turns out, watching the ad makes apparently makes consumers want to scream. L., of Frisco, Tex., calls it "the most annoying spectacle I have ever seen." Pamela, of DePew, N.Y., asks "how could you possibly think that this going to attract customers?" Kathi, of Orem, Utah, calls the ad "disturbing." "It does not encourage me to shop at your store," she said.

J. C. Penney -- or, as it now wishes to be called, jcpenney -- is implementing a new pricing and sales plan that its CEO says he thinks will make it "America's favorite store." Speaking to financial analysts in New York today, Ron Johnson unveiled "Fair and Square Pricing, making every day a great day to shop."

"The department store is the number one opportunity in retail today. 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," Johnson said. "Every initiative we pursue will be guided by our core value to treat customers as we would like to be treated -- fair and square."

The new pricing plan consists of three types of prices, Johnson said:

• "Everyday, regular prices, which are always great;
• Month-Long Values, even better prices on the things you need now; and
• Best Prices, jcpenney's lowest prices, which always happen on the 1st and 3rd Fridays of every month as jcpenney makes room for exciting new merchandise."

The plan is sort of lunar, actually, based as it is on a monthly calendar. There will basically be 12 sales per year, each lasting a month and each tied to the products customers are likely to want at that time of the year.

"We want customers to shop on their terms, not ours. 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," Johnson said.

New brands

Johnson's ebullient comments no doubt added salt to the wounds over at Macy's, which is seething at Martha Stewart for signing up to provide products to the revamped jcpenney.  Macy's has sued Martha, claiming it had an exclusive right to sell Matha Stewart products.

But while Martha may be tied up in court for awhile, jcpenney will have comedian Ellen DeGeneres as its new "brand partner." Ellen began her career in her teens as a jcpenney sales person, we're told.

Oh, and by the way, as part of what Johnson fondly called the "reimagining" of the company founded 110 years ago by James Cash Penney, the brand will henceforth be known as jcpenney, as noted above.  This is what marketing people call a new "brand identity."

There's even a new logo -- pictured above -- which we're told "combines the elements that have made jcpenney an enduring American brand, by evoking the nation's flag and jcpenney's commitment to treating customers Fair and Square."

"The square frame imagery will be evident throughout all of jcpenney's marketing, to remind customers to frame the things they love," a news release from the newly-reimagined company gushed.