Apparently hasn't won over old customers with changes
of ConsumerAffairs
Change doesn't appear to be going over very well at J.C. Penney. The nation's fourth-largest retailer reports it lost $163 million in its fiscal first quarter of 2012, compared to a profit of $64 million in last year's first quarter.
The loss, which Penney's blames on falling sales, was so significant the company announced it was discontinuing its quarterly dividend.
There are plenty of consumers who might be saying “I told you so.” Penney's new CEO Ron Johnson initiated sweeping changes at the chain at the beginning of the year, rubbing many long-time customers the wrong way.
Johnson did away with Penney's discounts, coupons and sales and instead, initiated a “three tier pricing system.” Marilyn, of Hot Springs, S.D., says the result seems to be higher prices now at Penney's.
“I bought an Alfred Dunner blouse at Herbergers today for $18.20,” Marilyn wrote in a post at ConsumerAffairs. “I priced the exact same blouse at JCP and it was $40. I use to shop Penney's for Alfred Dunner but will no longer shop there.”
Turn-off
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Sue, of Wilmington, N.C., says she was a long-time Penney's customer turned off by the changes
“Went through our Penney's a couple weeks ago after staying away awhile to recover from being shell-shocked by the commercials,” Sue wrote. “I've shopped Penney's for years! I was amazed to see a bustling well stocked and appealing local store morph into a dead-end! Didn't like the changes in merchandise, pricing or displays. I quickly walked through to get to another store. I have not been back!”
Even Penney's advertising campaigns have become a source of irritation for some shoppers. Pat, of Mountain City, Tenn., wrote to ConsumerAffairs about Penney's President's Day campaign back in February.
Annoying commercials
“I was annoyed by the screaming women commercial but I did not complain about it,” Pat wrote. “Their current commercial, however, should not be allowed on television. I am very offended to see a child dressed as Abraham Lincoln dancing around and grabbing his crotch. This type of child exploitation should be against the law. If this is the kind of thing that J.C. Penney is promoting, I certainly will not go into their stores.”
While Penney's may hope to eventually attract a new breed of shopper to its stores, it's losing Sue, Pat and Marilyn in the process. They, along with like-minded customers, are likely responsible for the sea of red ink.
Wall Street punished Penney's with a 14 percent one-day sell off in its stock, but most analysts say they still expect Johnson to turn things around, with a newly announced plan to cut costs by $175 million.