Penney to simplify pricing in strategy overhaul

J.C. Penney Co Inc (JCP.N) is doing away with deep discounts in favor of offering shoppers simpler pricing and promotions, its chief executive said at a presentation of the department store chain's strategy to reinvent itself.

Penney, whose sales performance has lagged that of Macy's Inc (M.N) and Kohl's Corp (KSS.N) in recent years, has hurt its brand and confused shoppers by focusing on discounts and promotions, Ron Johnson said at an event in New York.

"The customer knows the right price," Johnson said. "To think you can fool a customer is kind of crazy."

He said that only 0.2 percent of sales came from full price items. He also said Penney's 590 unique promotions a year were confusing and failed to draw shoppers. Some 72 percent of Penney revenue came last year from items discounted at least 50 percent.

"At some point, you seem desperate," said Johnson, who become CEO in November after 11 years at Apple Inc (AAPL.O), where he built that company's retail chain.

Starting February 1, Penney will offer three types of pricing -- everyday pricing, best prices and month-long deals -- and do away with clearance.

Johnson said the barrage of promotional emails from Penney was "confusing," leading him to see the need for simpler pricing.

(Reporting By Phil Wahba and Dhanya Skariachan)