Ron Johnson, ceo of JC Penney Co. Inc. (Plano, Texas) admitted that he has made “big mistakes” after the retailer reported its year-end financial results: sales down $4.28 billion, same-store sales down 31.7 percent, stock price down 55 percent, holiday sales down 28.4 percent.
The year in question roughly coincides with Johnson’s tenure with Penney, after he had been hired away from Apple Computer (Cupertino, Calif.) in late 2011.
Johnson said the retailer had gotten some areas wrong, including marketing and an assessment that customers wanted simple pricing without constant sales.
In January 2012, just months after he joined Penney, Johnson outlined a turnaround that would step away from sales and promotions and adhere to a three-tiered pricing plan. But he found that Penney’s customers, used to sales and coupons, were unwilling to give them up, and that the pricing plan confused shoppers.
“I had a personal conviction to deliver everyday value beginning with truth on the price tag,” he said yesterday. “We worked really hard and tried many things to make the customer understand that she could shop anytime on her terms.
“But we learned she prefers a sale, at times she loves a coupon, and always, she needs a reference price,” he said. He said the company would be running sales “each and every week” going forward, along with offering coupons.
He also said that the company’s marketing last year “failed to communicate our unique value proposition,” but that new ads, which started last week and focus on price comparisons, led to an immediate jump in traffic and sales.
“We are highly confident that as we return to some level of promotion, we’ll get the customer back in the store,” Johnson said.