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Is Penney breaking its 'no coupon' promise?

Associated Press Published: October 11, 2012

NEW YORK (AP) — Is J.C. Penney breaking its promise to offer no more coupons? That depends on who you ask.

In its latest email to customers, the department store chain's CEO Ron Johnson not only offered an update on the recent changes at the chain, but also dangled an incentive to come back: $10 off customers' next purchase.

Penney's spokeswoman Kate Coultas said it's not a coupon, but rather a gift for its loyal customers. "This invitation is in no way a reflection of a departure from our Fair and Square everyday low prices," she wrote in an email to The Associated Press.

At least one analyst disagreed.

"It's a coupon rebranded," said Brian Sozzi, chief equities analyst at NBG Productions. "This tells me that the traffic problem continues."

The $10 offer comes as the Plano, Tex.-based department store grapples with two consecutive quarters of losses and severe sales drops since Johnson eliminated hundreds of sales events and dumped coupons entirely on Feb. 1. That's because shoppers, accustomed to big sales, have fled to other stores. And while Penney is in the midst of rolling out new specialty shops within its stores, Johnson predicts that business will remain weak throughout the rest of the year.

During a meeting with investors last month in Dallas, Johnson said that sales were "tougher than planned," starting early in September.

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