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Desperate Move for Penney's Ron Johnson?


After the rather embarassing failure of his no-discounting strategy, JC Penney's CEO Ron Johnson may be resorting to desperate measures to drive traffic and sales at the department store. The New York Post reports that Johnson has asked clothing manufacturers to supply inflated prices for their goods, even though many manufacturers don't even offer suggested prices. The practice would then allow JC Penney to advertise supposed "discounts" from the manufactuers' suggested prices.

According to the Post:

“Aren’t you now going back to fooling the customer the way you said you wouldn’t?” an exec at one supplier asked. “Are we now saying, ‘Never underestimate the stupidity of the American consumer?’”

Penney officials didn’t respond to requests for comment yesterday.

To make sure it can back up its pricing claims, Penney is demanding that manufacturers confirm the suggested retail prices in writing, sources said.

“They’re saying, ‘I want a letter on file saying you have suggested this is the retail price,’” according to one manufacturing exec.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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