J.C. Penney is moving forward with a new ambitious plan for growth, despite market-wide concerns over weakening consumer spending and a slowdown in the housing market, CEO Myron Ullman told Erin Burnett on “Street Signs.”
“The middle third of the economy essentially is our customer," Ullman said. "She’s employed, she’s finding what she likes and we have a very great style, quality, a smart price. We feel good about the spring season...Our biggest category is our apparel so we feel very good about the prospects going forward.”
The department-store chain announced earlier on Wednesday that it plans to open 250 new stores over the next five years, including its first location in Manhattan, and introduce American Living and Sephora concepts in its existing stores. The company also boosted its first-quarter profit forecast and outlined an aggressive 16% annual EPS growth rate through 2011.
Analysts and J.C. Penney credit much of the company’s recent success to its private labels, such as the just-introduced intimate apparel brand, Ambrielle. Private brands make up about 45% of sales and are “increasing at a faster rate than the rest of the store,” Ullman said.
“We have a lot on our agenda, and accelerating growth and reaching industry leadership are our objectives,” Ullman said, but added that acquisitions are not part of the strategy for growth.
“We think we have plenty on our plate and our highest and best use of capital and resources is our [five-year] plan,” he said.