FORT WORTH — J.C. Penney Co. Inc. chairman and chief executive officer Myron Ullman 3rd told Wall Street analysts Tuesday that his goal was to make the retailer "the preferred shopping choice for Middle America.''
Looking back at 2006 and ahead to the strategic plan for 2007 to 2011, Ullman said during the annual meeting at the Doral Tesoro Hotel here that Penney's, based in Plano, Tex., had exceeded many goals ahead of schedule.
"Two thousand six was a very busy and successful year,'' Ullman said. "J.C. Penney has a major competitive advantage with three unique pairings: We have 600 mall stores paired with 400-plus off-the-mall stores — 45 percent private brands and 55 percent national brands — for a total of 1,000-plus stores working in synergy with our Web site and catalogues.''
Ullman said that last year the retailer had already exceeded the 2007 sales plan, rising 6 percent to $19.9 billion, and bettered the 2008 income plan, reaching $1.9 billion. In addition, Penney's last year exceeded the 2009 profitability target at 9.7 percent. Ullman also cited jcp.com volume, which rose to almost $1.3 billion; the launch of Sephora shop-in-shops, and the American Living collaboration with Ralph Lauren's new exclusive brands, such as Liz & Co. and Concepts by Claiborne, and the advertising campaign "Every Day Matters,'' which is intended to reposition Penney's with a greater emphasis on service.
Penney's is in growth mode, opening about 50 stores a year, but neither Ullman nor Ken Hicks, president and chief merchandising officer, commented on a WWD report last week that Penney's was said to be near a deal for major space at Manhattan Mall, just a block from Macy's Herald Square flagship.
Goldman Sachs equity analyst Adrianne Shapira, in a note to clients this week, said Penney's faced tougher same-store sales comparisons, but praised the company's continued improvements in merchandising and marketing.
"We're building on our strength and progress over the last two years and setting higher expectations for ourselves," Ullman said. "Our team has developed a new five-year plan….Our vision is to be the preferred shopping choice for Middle America….Our strategy includes inspiring our customers with our merchandise and services, [leading] in developing style and quality at a smart price and also [improving] merchandise relevancy."Toward those goals, Penney's has hired 153 full-time apparel designers and is recruiting committed sales associates to become the "growth leader'' in the retail industry, Ullman said.
Hicks said in his presentation that the retailer wanted to make an emotional connection with shoppers through inspiring merchandise and pricing strategy, brand positioning and life and style. Penney's has divided its customers into four lifestyles: conservative, traditional, modern and trendy. Traditional is the biggest and modern is the fastest-growing.
"The goal is to be the headquarters and exclusive destination'' for shoppers, he said.
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