Department stores need to find a way to reinvent themselves and J.C. Penney appears to be doing just that, retail analyst Dana Telsey told CNBC on Thursday.
The retailer announced Thursday that it is going to expand its home services by testing six new programs in 100 stores.
Starting later this month, shoppers will see signs in some J.C. Penney home departments and on its digital storefront for services in bathroom remodeling, home heating and cooling systems, quick-ship and installed blinds, whole home water solutions, awnings and smart home technology.
"Every single company has to try new things. If you are just going to sit there and be an apparel company the entire time you're not going to capture the new demographic, the new customers," Telsey said in an interview with "Power Lunch."
"Being able to change, I think, is a good thing."
J.C. Penney CEO Marvin Ellison, told CNBC on Thursday he is hoping to increase sales with both new and current customers. About 70 percent of the store's current shoppers are homeowners, he said.
"It's a $300 billion market that we believe we have the opportunity to pick up some significant market share," Ellison said during an exclusive interview on "Power Lunch."
Telsey, CEO and chief research officer at Telsey Advisory Group, believes department stores need to reinvent themselves to be a bit more like their European counterparts, "whether it is food halls, whether it's consumer electronics, whether it's gym equipment."
She's bullish on J.C. Penney because she said she's seen the balance sheet improve.
"I see them taking actions to enhance the operations, whether it's closing stores, whether it's investing in systems, whether it's taking a look at the national brands and the private brands," she said. "Staying the same doesn't help you move forward. Making change does."
Telsey has a buy rating and $11 price target on J.C. Penney. The company's shares rose 1 percent to $6.30 on Thursday.
— CNBC's Courtney Reagan and Mack Hogan contributed to this report.
Disclosure: Telsey Advisory Group provides investment banking and other non-investment banking securities-related services and non-securities services and may seek such relationships from companies about whom it provides research.