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J.C. Penney apologizes to customers

After failed ‘reinvention’ retailer fires its CEO and returns to newspaper advertising with deals

Posted: May 7, 2013 2:00 a.m.
Updated: May 7, 2013 2:00 a.m.

J.C. Penney returned to newspapers on Friday by advertising discounts for shoppers after the company fired its CEO for getting rid of most sales and alienating loyal customers.

 

J.C. Penney is sorry and it wants your business back.

That’s the gist of its latest ad, a public “mea culpa” which the mid-priced department-store broadcast to the public – and its customers.

The move comes after the Plano, Texas-based company last month fired its CEO, Ron Johnson, after 17 months on the job and rehired his predecessor Mike Ullman.

Johnson’s ambitious changes included getting rid of most sales and bringing in new, hip brands. The strategy was designed to attract younger, wealthier shoppers in a bid to reinvent the stodgy retailer, but it alienated Penney’s loyal customers and caused sales to plummet.

On Friday, the retailer was back in newspapers, including The Signal, by distributing circulars with coupons for shoppers.

A key investor, William Ackman, said at a conference that J.C. Penney’s performance under the no-coupon strategy implemented by ousted CEO was “very close to a disaster.”

“Consumers want deals, and they’re willing to wait for them,” C. Britt Beemer, chairman of America’s Research Group, a consumer research firm, told the Associated Press.

The retailer’s apology came in ad titled “It’s no secret.”

“Recently J.C. Penney changed,” a voiceover states. “Some changes you liked and some you didn’t. But what matters with mistakes is what we learn. We learned a very simple thing, to listen to you.”

The ad acknowledges the missteps and asks customers to return to its stores.

Successful companies have long known that no matter how hard it might be to budget for, it’s important to set aside a portion of their budget for marketing, experts said.

Valencia Custom Shower Doors has been advertising daily in The Signal for the past year.
It’s one of our more successful advertising campaigns, said Christy Crawford, co-owner.

“We do get a lot of phone calls,” she said.

A long time resident, Randy Deckers of Deckers Electric has been advertising services for his business in The Signal for years.

“It generates business,” Deckers said. “Last week a customer had my ad on their counter. That job paid for my ad.”

Once he gets a new client, many of them become repeat customers, he said.

J.C. Penney Media Relations Director Daphne Avila said the idea for the ad began several months ago after an “extensive” review of customer feedback.

“We want to give customers our assurance that what they loved about J.C. Penney – trusted brands, great style and affordable prices – will be inherent to every shopping experience,” she said.

When a company is in free fall, it sometimes need to call a time out and say, ‘Wait a second. We’re going to get this under control,” Allen Adamson, managing director of branding firm Landor Associates, told the Associated Press.

“The answer may be further down the road as to why they come back,” Adamson said.

Shares closed at $16.78 in trading Monday afternoon. They have traded in a 52-week range of $13.55 to $36.27.

 

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