JC Penney Announces Surprise July 4 Sale
Department store chain J.C. Penney (NYSE: JCP) revealed Tuesday that it would be having a July 4 price rollback.
The move is particularly surprising because CEO Ron Johnson, after joining the company in November, announced that he would be embarking on a new pricing strategy. Johnson had planned to avoid sales, instead focusing on consistent lower pricing.
Benzinga reported on June 19 that J.C. Penney's President, Michael Francis, was leaving the company after failing to successfully redefine the brand. The company gave no reason for Francis' departure, though Johnson said in a statement, "We thank Michael for his hard work at J.C. Penney and wish him the best in his future endeavors."
The news has come as a surprise to many analysts, some of whom have characterized Francis as the fall guy. But when Johnson made the move from Apple (NASDAQ: AAPL) to J.C. Penney (a career choice that was a surprise to many), he became determined to reverse the company's fortunes.
Some investors in J.C. Penney may have been alarmed by the recent drop in revenue. Johnson's "no sales" strategy has frequently been cited as the culprit--J.C. Penney's customers are used to coupons and the comforting feeling of big sales.
In May, J.C. Penney announced disappointing first-quarter results. Following that report, Johnson made it clear that he would work to better explain the new pricing strategy.
According to the New York Post, J.C. Penney is relaxing that strategy. The company emailed customers with thousands of surprise discounts.
The NY Post quoted Deutsche Bank analyst Charles Grom, who said in a note to clients, "We believe JCPenney is adding today's event to help draw traffic ahead of the holiday week."
It remains to be seen if J.C. Penney is abandoning the no sales policy completely, or if these July 4 discounts are a singular event.
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