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J.C. Penney says turnaround could take longer

The entrance of a J.C. Penney store is pictured in Arcadia, California March 1, 2013. REUTERS/Mario Anzuoni
The entrance of a J.C. Penney store is pictured in Arcadia, California March 1, 2013. REUTERS/Mario Anzuoni

(Reuters) - J.C. Penney Co Inc said in an annual report filed on Wednesday that fixing its performance could take more time than it initially believed and suggested that any change in its strategy could be expensive.

Penney launched a turnaround last year that did away with most coupons and discounts as well as open the first "shops-within-its stores" on its way to 100 boutiques at most stores.

But sales declined 25 percent in the last fiscal year as its price-conscious shoppers balked at the new promotional strategy, and the department store reported a deep loss.

"It may take longer than expected or planned to recover from our negative sales trends and operating results, and actual results may be materially less than planned," Penney wrote in its annual report for the fiscal year ended February 2.

The company has backtracked partially on its pricing and brought back couponing in a bid to lure back shoppers.

Penney, set to launch a new home section next month, said it may need to change its shops plan, but warned that could be expensive and could confuse shoppers.

"Any changes to our strategies could be substantial, and if implemented, could result in significant additional costs," the company wrote in the report filed with the U.S. Securities and Exchange Commission.

(Reporting by Phil Wahba in New York; Editing by Leslie Gevirtz)

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