J.C. Penney Company Inc. shares jumped Tuesday after the retailer's CEO said it would bring back some of the big discounts it ditched last year in a bid to woo back shoppers.
J.C. Penney will begin adding back this week some of the hundreds of sales it eliminated last year in hopes of luring shoppers who were turned off when the discounts disappeared. The struggling retailer also plans to add price tags or signs for more than half of its merchandise to show customers how much they're saving by shopping at its stores.
The reversal comes on the eve of the one-year anniversary of its original vow to almost completely get rid of the sales that Americans covet but that cut into a store's profits. The idea was to offer everyday low prices that customers could count on.
J.C. Penney's sales and stock price sank after it moved away from its traditional methods. It also increased the criticism of its new CEO, former Apple Inc. executive Ron Johnson.
Analyst have hailed Johnson's other moves, such as revamping its stores, adding better brands and putting stores within stores. The pricing strategy, which was a key part of Johnson's plan to reinvent the department store chain, simply hadn't sat well with most.
The company's difficulties are clear in its financial results. In the first nine months of its current fiscal year, Penney lost $433 million, or $1.98 per share, compared with a loss of $65 million, or 30 cents per share, a year earlier. Total sales dropped 23.1 percent to $9.1 billion.
Analysts are expecting the company to post a loss on declining sales for the fourth quarter as well.
J.C. Penney's shares jumped 8.3 percent by midday to $29.82.
The upward movement is a welcome sign after a yearlong decline in its stock price.
J.C. Penney's stock price jumped after Johnson was appointed on the hopes he'd renew the brand. But investors sent the company's shares down more than 55 percent from a peak of $43 in the days after the plan was rolled out last year.
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