Chairman and Chief Executive Myron "Mike" Ullman III said late Tuesday that the company is stretching out its five-year store growth strategy because of the economic downturn, with plans to open 36 new stores this year instead of the 50 it had projected. It also aims to renovate 20 units this year, instead of the planned 65.
But Ullman also told analysts that the company plans to accelerate its merchandising innovation. Penney this week announced several new lines for teens, along with the launch of a new store brand of home furnishings and accessories called Linden Street.
Ullman's address, which kicked off a two-day analyst meeting, came as Penney and other retailers have stumbled in the face of a consumer spending slowdown amid higher gasoline prices, slumping home prices and a drop in consumer confidence. Penney slashed its first-quarter profit outlook last month, and last week the retailer reported a larger-than-expected 12.3 percent drop in same-store sales, or sales at stores open at least a year, for March.
Ullman told analysts that Penney is taking "a hard look" at 2009 and will figure out its store growth plans for next year in July.