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Botched RFID Launch Made Penney Target for Thieves

J.C. Penney Co.JCP +3.83% was struck by a surge of shoplifting after it tried to transition to a new inventory management system that used radio tagging. Penney’s effort to transition in 2012 led it to prematurely cut an older anti-theft system, allowing thieves to target the retailer, which cut a percentage point off its profit margin last quarter, Chief Executive Myron Ullman told investors Wednesday. “This is the result of actions to take security devices and security measures off of the inventory,” Mr. Ullman said. The move represented one of the biggest conundrums facing technology leaders: how to transition to a system that promises thicker profit margins and lower costs while not losing the function of the older platform in the meantime.

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