Watch out Macy’s—JCPenney plans to take Manhattan (Mall)

PLANO, TEXAS —JCPenney will be opening its first store in Manhattan as early as late 2008 or early 2009, the company’s management revealed at its analysts conference in mid-April. JCPenney has signed a letter of intent to open a 150,000-square-foot store in Herald Square, best known as the neighborhood of the Macy’s flagship. The new store will be in a prominent location in a property known as the Manhattan Mall.

According to JCPenney senior vp of property development Michael Dastugue, a letter of intent was recently signed between the retailer and property owner Vornado Realty Trust, which includes a total of 164,000 square feet of retail space, in January of this year.

“The Manhattan Mall has some structural issues now with the way it is laid out,” noted JCPenney ceo Mike Ullman, during a press conference at the analysts meeting. “Vornado is working on ways to change the look and feel of that.”

The midtown store is part of JCPenney’s plan to open 250 new stores over the next five years, an increase from the company’s previous guidance of 150 stores by the end of 2009.

“Building on the strength and progress of the last two years, our new long-range plan is designed to make JCPenney the growth leader in the retail industry,” Ullman said. “We have tremendous confidence in our management team…to achieve our vision to be the preferred shopping choice for Middle America.”

JCPenney’s new Manhattan store will include a Sephora store-in-store as well as American Living merchandise. Ullman said that he expects the new Manhattan store to be very profitable, given the success of the company’s other stores in the New York boroughs.

“Our stores in Queens and the Bronx are two of our most profitable…locations,” Ullman said. “We’re really excited about the possibilities that the Manhattan store will bring… It’s one of the busiest retail environments in the world.”

JCPenney joins other big-box retailers with coveted store space in Manhattan, such as The Home Depot, Kmart, Best Buy and Bed Bath & Beyond. Target will open up a 135,000-square-foot store in Harlem in May 2008. Target ousted Costco in a bid for the spot, which is located between 116th and 118th streets in a new development called East River Plaza. Wal-Mart has still been unsuccessful with its hopes to enter Manhattan, although it too has stores in the boroughs.