Penney's Eyeing Mervyn's Sites

Chicago, IL, September 20-- J.C. Penney could purchase as many as 40 stores from the new owners of Mervyn's in a move that could notably downsize the Mervyn's chain while helping Penney expand its off-mall store base. Merrill Lynch analyst Daniel Barry said Friday that he believes Penney will purchase selected stores over the next six months as Mervyn's shakes out underperforming locations from its struggling discount-store base. That could help Penney get about halfway to its plan to open as many as 100 slimmed down versions of its traditional mall based department stores. In the first major store expansion in decades, Penney is jumping on the retail bandwagon of opening variations of its mall-based traditional department stores in so-called off-mall locations. Those tend to be strip-like shopping centers in which customers can park relatively close to the stores for quick shopping trips. Spokesman Quinton Crenshaw said Penney already has converted two former Mervyn's locations in the Minneapolis area. However, those were stores that May Department Stores bought from Target Corp as part of its purchase of the Marshall Field's chain. The bulk of the Mervyn's stores were purchased by Sun Capital Partners and three partners from Target last summer. Most of those Mervyn's stores are in California -- an area Barry sees Penney eyeing for development. Barry believes Penney can pick up as many as 40 stores for about $560 million.

Related Topics:Shaw Industries Group, Inc.

Print the Article