J.C. Penneynew pricing strategy is "the first key step in the transformation" of the retailer, CEO Ron Johnson told CNBC Wednesday.
"The pricing strategy is set for the long run," he said after the company unveiled its plan. Instead of sales and other "gimmicks," as he called it, most goods will have one "everyday price," while some will be priced for "value" for a month. Goods the retailer wants to move fast will be priced even lower.
Penney is also doing away with racks and creating stores within stores, such as the one planned with Martha Stewart, in whose company Penney bought a sizable stakein December.
Johnson would not comment on competitor Macy'slawsuit against Martha Stewart Living Omnimediacharging breach of contract except to say, "We did a lot of due diligence before Martha Stewart and J.C. Penney's established our partnership."
The company has other big plans in the pipeline, including a "town center" store concept.
"We're going to be relevant again," predicted Johnson, a former Apple retail executive, and "10 years down the road we will have found a way to integrate the digital and physical worlds in a way that the physical retail store retains its position as the centerpiece of American retailing."
William Ackman, chief executive at retail investor Pershing Square Capital Management, seemed pleased by the retailer's plans. In a separate interview he told CNBC the company is continuously improving, “but I think you’re going to see a more dramatic change in the next few months than we’ve seen in the last 20 years."
He stressed that while Pershing Square is one of J.C. Penney's biggest investors, "I don't want to run a retailer."
What "we did is we and the rest of the board worked to find the best person in retail to run the company. We put Ron in charge and we’re letting him run the company," he said, adding, "you’ll see meaningful reinvestment in J.C. Penney."
Ackman said he is not pressuring the retailer to cut costs.
"What Ron is going to do is make the company a more efficient company and he’s going to grow the company," Ackman said. "I expect J.C. Penney will meaningfully add jobs over the next five years."