'We Will Return to Growth This Year': JC Penney CEO
"I believe we will return to growth this year," said Ron Johnson, CEO of J.C. Penney in an interview with CNBC. "As we approach this year, the number one priority is to return to growth and the key to that is communicating value. We'll do that in whatever way it takes to return to growth."
"We are aggressively building the new JCP. We are on track for 30 new stores and by the middle of the year, about 40% of our stores will be transformed, when that happens I think people will see the new J.C. Penney," he said. "This year we have a lot of new merchandise."
A year after Johnson reshuffled the company's pricing strategy, eliminating sales and coupons from the company's offerings, the company is doing an about-face by reintroducing event driven sales.
"Customers didn't understand" the company's new approach last year, said Johnson, "So we're going to reintroduce sales to deliver the best value we can. We'd love to be America's style leader for value. I still believe the customer knows the right price for every product."
"We always wanted to deliver value, but customers didn't hear that as much as investors," he said.
"If I could do it all over again I'd be a little more clear on pricing. But we had a business model [a year ago] that didn't have any growth in its future," he said.
Earlier this week, JCP stock was under pressure after a group of bondholders claimed that the merchant is in violation of a bond agreement. The bondholders contend that the department store chain violated an inventory-secured credit agreement in January 2012 without providing security for the bondholders, according to a statement from Penney.
"We think that this is totally groundless and there are a lot of opinions that support that," Johnson said. "We don't believe that there is any truth to this and we'll have to see it play out."
When asked about reports of potential layoffs at J.C. Penney, Johnson called them "rumors" and said that ultimately we have to have the right cost structure for the business and we have to grow. We're going to ensure that we do those two things."