Simplifying the pricing and promotion structure at JCPenney is central to CEO Ron Johnson’s dramatic, multi-year makeover plan. The retailer had been running 590 promotional events per year – almost two per day – by the time the former Apple executive took over late last year.
So on February 1, the retailer inaugurated a three-tier approach, consisting of everyday prices, month-long sales on selected items, and clearance pricing. These drastic changes caused short-term (albeit expected) pain for JCPenney, which saw its net sales decline 20.1% and its comp store sales drop 18.9% during the quarter that ended April 28.