JCPenney Increases Retail Prices on Special Collections by 67%

JCPenney has been in the news a lot recently, largely due to its erstwhile CEO's unsuccessful attempts to reinvigorate the brand. Last year, Ron Johnson announced a curious pricing strategy that did away with sales and coupons and instead aimed to offer "Fair and Sqaure" prices that were, in theory, already as good as what you might find during sporadic sales events. Shoppers didn't "get it" however. As a result, sales slumped and the project was dumped.

So now, to protect profit margins and win back its customers, JCPenney has announced that it's returning to the standard practice of starting with higher retail prices and then discounting items during sales and with coupons, because this "motivates" customers. While virtually every retailer plays this "high-low pricing" game, we wondered how prices might change during the transition. Based on some of the preliminary deals we're seeing, new list prices on select items are significantly higher than before — which makes deal shopping that much trickier.

Special Collection Prices Rise by As Much As 67%

In its simplest form, JCPenney's new sales plan is to raise prices on select items and mark them down periodically with sales and coupons. While there's nothing inherently wrong with this model, customers should be aware that prices have spiked significantly on collaboration lines, and we've yet to see any sales to bring them back down to previous levels.

For instance, this Design by Conran Skipper Stool had a retail price of $75 at the start of the month, and we listed a deal that knocked it to $65 after a coupon. Today, it's selling for $125, which is a 67% increase from its former list price. Currently there's no additional promotion available to knock that price down. Likewise, the pictured Happy Chic by Jonathan Adler Crescents Heights 17" Side Table retailed for $150 last week, available for $135 after a coupon; today it carries a hefty $245 price tag — a 63% increase in seven days.

In theory, JCPenney's price model just means that customers have to be all the more paient and wait for a significant sale. But it should be noted that even with a 20% off coupon (which so far this year has been one of JCPenney's most common discount codes), the above-mentioned deals would still be priced significantly higher than the prices we found in recent weeks. The side table with a 20% off discount, for example, would only fall to $196, which is more than the $135 price tag from last week.

Coupons Cancel Out Price Hikes on Cheaper Product Lines

JCPenney's new pricing scheme will reportedly affect all of the store's in-house brands, but it seems to most negatively inflate special collection items like the aforementioned Design by Conran Skipper and Happy Chic by Jonathan Adler products. Cheaper lines like St. John's Bay and Arizona will reportedly receive just modest increases. Reuters suggests that retail prices for the standard store lines have increased by 20%, citing an example of a T-shirt that went from $5 to $6. In that case, regular JCPenney coupons may negate the price hikes.

Our recommendation for JCPenney shoppers: keep your credit card in your wallet until these products go on sale. If you're looking for a special collaboration line, wait until the price is marked 50% to 60% off so you aren't paying more than you would have before the strategy change. For cheaper everyday items, never make a purchase without at least finding a coupon that will knock about 20% off.

Readers, is there anything you had your eye on at JCPenney that you noticed has jumped in price recently? Which pricing model do you prefer? Let us know in the comments below.