JCPenney CEO Ron Johnson (above) is reportedly asking vendors to conjure up phony retail markups in order to make prices seem lower at the one-time respectable department store chain. (Getty Images)
Fake prices are coming back at JCPenney, and this time they’ll be more fake than ever.
In a fresh bid to highlight Penney’s prices as low, CEO Ron Johnson is pushing some manufacturers to concoct phony suggested retail markups for their clothing, sources told The Post.
The plan, insiders say, includes erecting signs and fixtures that will display the sometimes made-up retail prices, while tagging the clothes and accessories themselves with Penney’s own lower prices.
“They want to have a table of sweaters with a sign saying ‘regular price, $30,’ and the price tag will be $22,’” one source told The Post in a hypothetical example.
As he scrambles to recover from his disastrous move last year to ditch traditional department-store discounting, Johnson isn’t asking suppliers to suggest retail markups that are artificially high, sources emphasized.
Nevertheless, several clothing manufacturers noted that they’ve never made a practice of suggesting retail prices for their wholesale goods to begin with, instead leaving that job to the retailers.
“Aren’t you now going back to fooling the customer the way you said you wouldn’t?” an exec at one supplier asked. “Are we now saying, ‘Never underestimate the stupidity of the American consumer?’”
Penney officials didn’t respond to requests for comment yesterday.
To make sure it can back up its pricing claims, Penney is demanding that manufacturers confirm the suggested retail prices in writing, sources said.
“They’re saying, ‘I want a letter on file saying you have suggested this is the retail price,’” according to one manufacturing exec.
Johnson — a former Apple exec whose drastic switch away from coupons and sales events last year sent shoppers fleeing in droves — is pursuing the scheme despite the fact that he accused department stores last year of using inflated “fake prices” to make discounts look steeper.
“Now most things are on 60 percent markdown, and every time we do that, we’re discounting Penney’s brand,” Johnson told investors at a splashy event a year ago this week.
Johnson added that he thought shoppers, smart enough to know when a product was priced right, were “insulted” by discounts on artificially high markups.
A year later, however, Johnson is scrambling to stem the hemorrhage of cash and plunging sales resulting from his flopped “fair and square” strategy. Penney’s shares are down almost 48 percent in the last year.
To lure shoppers back to stores during the crucial fall and holiday seasons, Johnson backtracked, staging temporary sales events and widespread markdowns.
Still, insiders say Penney’s sales at stores open at least a year, a key indicator of retail performance, are on track to drop a heart-stopping 30 percent for the crucial fourth quarter, and possibly more.