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Department store retailer J. C. Penney unveiled a four-year plan to transform the company and reported its financial outlook. At a launch event in New York City, CEO Ron Johnson and President Michael Francis described how the changes will transform the shopping experience at the company's stores "by fundamentally re-imagining every aspect of the company's business and boldly pursuing change."
Among the changes will be a new pricing strategy called Fair and Square, utilizing a monthly schedule of pricing promotions.
Stores will also be restructured into a "Main Street" concept, with the entire store merchandised into 80 to 100 brand shops. A new monthly book, beginning in February 2012, will go out to consumers with 96 pages of highlights for that month. The retailer also announced a partnership with celebrity talk show host Ellen DeGeneres, who will help promote the retailer's changes.
COO Mike Kramer said the new structure "Dramatically simplifies our operations and significantly improves the company's ability to flow margins through to the bottom line."
Initiatives to reduce $900 million in expenses will begin in February 2012. 2012 will also see the company invest $800 million in capital expenditures related to its transformation – most spent enhancing stores and installing new in-store shops. Starting in August 2012 it will begin a month-by-month, shop-by-shop strategy to update stores, with all changes expected to be complete by the end of 2015.
The retailer will no longer provide quarterly sales or earnings guidance, and will no longer report monthly same store sales results.
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