I noticed this Bloomberg article that J.C. Penny, the department store retailer, suffered its biggest profit loss in 30 years under the leadership of its new CEO.
No, not a normal blog topic for Dead Reckoning, I realize. But this one's, well, personal.
My wife, the greatest bargain hunter in the world, used to make J.C. Penny a regular stop. And then, lo and behold, she stopped abruptly. Apparently she wasn't the only one!
Because the genius running the company decided that there is no need to offer silly little things like "sales." Yes, this brilliant tycoon of industry decided that this whole free-market concept of price discovery is so positively Medieval. Instead, he took the entire company in the direction of running "everyday" prices. They told customers that there is no need for slashing prices on anything in the store because, hey, the price on the garment is the real, fair price! Honest. And, because we are being totally, awesomely honest with you, you should just pay what we say.
Yeah, right. So instead of finding clearance racks and markdowns, garments J.C. Penny used to be happy getting 3 bucks for were suddenly $10 to $15.
Welcome back to the land of price discovery, pal!
They "discovered" over the past year that consumers decide what the "real" everyday price is, not the retailer. You know, basic Econ 101 kind of stuff. But hey, who am I? I'm no economist but I predicted this new direction for J.C. Penny would be a disaster.
And so it was.