J.C. Penney's (JCP) Johnson Hitting Wall with New Pricing Scheme
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J.C. Penney (NYSE: JCP) CEO Ron Johnson recently changed the pricing scheme at the retailer's stores to "Fair and Square." Employees are hoping he will apply the same logic to them.
According to the NY Post Tuesday, the confusion behind the new pricing policy is causing Johnson to make broader cuts to both workforce and wholesalers. One wholesaler said J.C. Penney is begging for discounts, which is something the company said it wouldn't do. Even employees don't agree with the new strategy, saying customers are finding it more complicated than the tried-and-true discount-based pricing strategy.
Of course, employees and wholesalers didn't lead one of the biggest retail moves for the world's largest consumer electronics and media company: Apple (Nasdaq: AAPL).
J.C. Penney is also said to end commission-based compensation in several departments, including hair salons, shoes, and jewelry.
Johnson is demanding discounts as much as 10 percent on wholesale inventories, as spring sales are said to be down as much as 15 percent, wider than Johnson's own predictions.
The new "Fair and Square" strategy pins prices at levels already below those of rivals Macy's (NYSE: M) and Kohl's (NYSE: KSS). With no extra discount's being offered, shoppers believe they're not getting the best deal possible, and end up leaving empty handed.
Shares of J.C. Penney are about 0.2 percent lower early Tuesday.
According to the NY Post Tuesday, the confusion behind the new pricing policy is causing Johnson to make broader cuts to both workforce and wholesalers. One wholesaler said J.C. Penney is begging for discounts, which is something the company said it wouldn't do. Even employees don't agree with the new strategy, saying customers are finding it more complicated than the tried-and-true discount-based pricing strategy.
Of course, employees and wholesalers didn't lead one of the biggest retail moves for the world's largest consumer electronics and media company: Apple (Nasdaq: AAPL).
J.C. Penney is also said to end commission-based compensation in several departments, including hair salons, shoes, and jewelry.
Johnson is demanding discounts as much as 10 percent on wholesale inventories, as spring sales are said to be down as much as 15 percent, wider than Johnson's own predictions.
The new "Fair and Square" strategy pins prices at levels already below those of rivals Macy's (NYSE: M) and Kohl's (NYSE: KSS). With no extra discount's being offered, shoppers believe they're not getting the best deal possible, and end up leaving empty handed.
Shares of J.C. Penney are about 0.2 percent lower early Tuesday.
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