Now it’s Blatchford who is fighting for survival. Penney in St. Petersburg, Fla., where he was a custom decorating studio coordinator. Penney contested his claim, he said. Penney also recently filed an arbitration petition to get Blatchford to give back any company documents that he might have. But Blatchford thinks the arbitration is really just an attempt to discourage him from speaking out about the company. Penney declined to comment on Blatchford’s situation or its pricing strategy. Penney belies an open retail secret: Discounts, sale prices and big promotions are largely a game of smoke and mirrors. Penney ousted its CEO last year and his successor reinstated old pricing strategies, it was a largely unconfirmed open secret. Once customers are taught to crave discounts, it becomes addictive, and they keep coming back for more. “We are chemically programmed to respond to sales,” Ellwood said. Penney Co. 16, 2013. Photographer: Patrick T. Penney’s trouble with sale pricing started with CEO Ron Johnson, who in 2012 pledged to eliminate “fake prices” inflated prices used throughout the retail industry to convince customers they’re getting a great deal. Johnson eradicated coupons, sales and discounts at the 112 year old retailer. Penney. Sales plummeted by an astonishing $4.3 billion in the first year of Johnson’s turnaround plan. “Coupons were a drug,” the CEO admitted on a 2012 conference call with investors and analysts. “They really drove traffic.”
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