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J.C. Penney swaps pricing strategy this year

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After a failed experiment at being a deeply discounted department store, J.C Penney stores are reverting to the old model of using sales events and coupons to draw in customers.

The national retailer will issue more coupons on a weekly basis, but will raise the prices on store merchandise to make the system work. The strategy is a flip-flop from the franchise’s doomed “fair and square” campaign launched in 2012 that slashed all prices at its stores but ditched periodic sales and coupons.

Store prices are being hiked back to 2011 levels in an attempt by J.C. Penney Co. to rebound from a $552 million fourth-quarter loss. For example, the New York Post reported Tuesday that a pair of Nike swim trunks priced at $25 had been bumped to $45. And women’s apparel is expected to be on sale for 20 to 25 percent off most of the time under the plan, compensating for the higher prices.

J.C. Penney, whose north country presence is anchor stores at Salmon Run Mall in Watertown and St. Lawrence Centre mall in Massena, began raising prices in February, the start of its 2013 fiscal year.

Sales events already have been reintroduced to catch the attention of shoppers, Watertown store manager Daniel B. Cotton said. The store began mailing coupons to customers enrolled in its J.C. Penney charge program in February and has advertised its sales in fliers in Northern New York Newspaper Corp. publications, but raised prices on merchandise at the same time. It has offered four sales in March.

“Last year we went through a price structure change” to offer lower everyday prices, “and the customers told us they didn’t like that as much as getting coupons and sales,” Mr. Cotton said. “We are returning to pricing models the company used before we went through a pricing structure change.”

Some customers enjoyed seeing consistently lower prices at the store last year, Mr. Cotton said. But the company ultimately decided that offering sales would bring in more revenue. “We had many comments where people loved the fact they didn’t have to figure anything out and (saved) by paying at the regular price,” he said. “But if you look at what the industry does, it’s obvious that customers have told us that they miss the coupons and sales.”

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