JCPenney CEO “Chainsaw Ron” Johnson is planning a new “Fair and Square” color pricing system. Pink isn’t included—except for the thousands of employees facing pink slips. (Getty Images )
A bold new pricing strategy at JCPenney calls for red tags, white tags, blue tags — and pink slips.
CEO Ron Johnson — a former Apple exec who took the helm less than three months ago — unveiled a dramatic plan yesterday that will nix the retailer’s decades-old strategy of discounting merchandise in flurries of daily and weekly sales events.
But while Johnson touted the “honesty” of the new “everyday price” scheme at a splashy event in Manhattan, he admitted afterwards in an exclusive interview with The Post that the streamlined price strategy is also spurring job cuts.
“Obviously, there’s an opportunity to rethink how we do things,” Johnson told The Post, noting that workers at an average Penney store log more than 30 percent more hours than workers at an average store operated by archrival Kohl’s. “The goal is to get people meaningful work to do.”
As reported Monday by The Post, Penney is slashing thousands of workers as it does away with the daily re-tagging of merchandise for sales events and littering stores with temporary signs and displays.
Nationwide, about 4,700 full-time workers have been offered severance packages, sources said. In total, the new price overhaul is affecting more than 15,000 workers, with many of those looking to stay being forced to take lower-paying shifts and shorter hours, according to insiders.
“They’re particularly keen to get rid of the workers who have benefits,” said one source, adding that the company is taking meticulous care to avoid potential charges of age discrimination.
While Penney officials on Monday insisted recent layoffs mostly affected temporary workers, Johnson conceded that his new strategy to promote merchandise categories on a monthly basis will have consequences.
“If you only change prices once a month, there’s nothing for them to do,” Johnson said. “All of those hours can go to serve the customers, or you can make your business a little more economic.”
Johnson declined to comment on whether still more job cuts are on the way this year, but said that the temporary pain will pay off in the long haul.
“Our goal is to grow,” he said. “We’ll add jobs, and I believe we’ll be one of the largest net adders of jobs in this country in the years ahead.”
In August, Johnson will begin rolling out in-store shops on a monthly basis to lure better brands. As he does so, sources said Johnson is prodding suppliers to improve the quality of their fabrics and designs. Martha Stewart inked a housewares deal and upscale fashion designer Nanette Lepore will produce an exclusive line for teenage girls.
“Our customers are wearing clothes at a higher quality and price point than we offer, and that’s a little bit of a disconnect,” Johnson said. “We’ve been undershooting our customer for a long time.”