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Major Changes Coming at JC Penney

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When Ron Johnson, the retail executive credited with making Apple stores into the money-making machines they are today, took over the helm at JC Penney last June industry executives expected he would spell major changes for the lagging department store. Today, they got a glimpse of what Johnson has in mind.

At a much-publicized media event this afternoon, Johnson announced that JC Penney would do away with its confusing discounting strategy and will re-design the chain's stores to resemble a Main Street experience, with anywhere from 80 to 100 stores-within-a-store for customers to choose from.

According to Johnson, during 2011, JC Penney ran 590 different promotions, which were largely ignored by shoppers:

“At some point, you, as a brand, look desperate if you have to market that much.” He will move to monthlong promotions, on which Penney will spend $80 million a month, he said. And instead of mailed fliers, the company will have a 96-page magazinelike circular.

From now on, instead of marketing items as "x percent off full price," JC Penney will sell merchandise using only three price levels: regular price, month-long value and best price, which will be offered on the first and third Fridays of every month for merchandise that hasn't cleared at regular or month-long value prices.

In addition, the retailer will vastly expand its store-within-a-store program, with brands including Martha Stewart and l'amour nanette lepore. For full details on the overhaul, click here.

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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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