It has signed a letter of intent to lease 150,000 sf, with a 125,000-sf retail area, in Manhattan Mall, which, as GSR reported, was acquired this January by Vornado Realty Trust. The store, located on Sixth Ave. between 32nd and 33rd streets, is one block from rival Macy's flagship in Herald Square. It will be constructed in conjunction with Vornado's redevelopment of the mall.
This will be Penney's first store in Manhattan. Michael Dastuque, Penney's SVP of property development, said it will be "the centerpiece of Manhattan Mall . . . a showcase in the fashion capital of the US." As GSR previously reported, Penney set up a temporary "pop up" store in Times Square in 2006, where it showcased its newest fashion merchandise and sold through interactive kiosks.
Houston and Chicago are also among the markets slated for additional Penney units as it picks up the pace. Dastuque says the company opened just one new store in Chicago over the past 10 years. By contrast, it will open six new units there this year, another three in 2008, "and we're pursuing more in 2009 and beyond," he says.
The company has also juggled its assets in Houston, closing three mall locations and opening five. This year it will add another two and open three more in 2011.
The 250 new units on the drawing boards will be distributed across the country "with a special focus on the top 20 markets," Dastuque says. Off-mall formats will be used to grow the store base, and new mall locations will be limited to opportunistic takeover locations, particularly in areas where retail space is limited.
Openings will take the company's total number of US units above 1,200 by 2011. Between 2008 and 2011, Penney plans to invest nearly $1.3 billion a year in capital expenditures.
The off-mall format will also be the model for renovations. There will be 300 of those within the next five years. The goal, Dastuque says, "is to make them look as close to new as possible." At renovated stores to date, profits have improved 21%, he adds.
During the analyst meeting, Myron Ullman, chairman and CEO, said the long-range plan "is designed to make JC Penney the growth leader in the retail industry." Its vision, he says, "is to be the preferred shopping choice for Middle America."
Financial projections call for total sales increases in mid- to high single digits annually, and comp store increases in the low to mid single digits each year. The company also expects a 16% compound annual growth rate in earnings per share from 2008 through 2011, according to Ullman.
JCP common stock ended trading on the NYSE at $80.87 a share, down nearly 1.2%, on the day of the analyst meeting on April 18. The 52-week high of $87.18 a share was reached on this Feb. 21. The 52-week low of $59.51 a share occurred on May 30, 2006.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
