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IN BRIEF

PENNEY UNVEILS BOLD EXPANSION

J.C. Penney Corp. unveiled a new real estate strategy last week that includes spending $1 billion to renovate 250 stores and roll out 170 new ones over the next four years. Nine out of 10 of the new units will be off-mall stores occupying about 100,000 square feet, said Michael Dastugue, senior vice president and director of property development, at an analyst meeting at the retailer’s Plano, Texas, headquarters. “Great results have allowed us to be more aggressive,” Dastugue said, explaining that Penney’s existing off-mall stores are attracting more weekday traffic than its mall stores and have reached $200 per square foot in annual sales volume. “Our mall stores remain our core strength,” he said, and added that the chain would try to buy former Federated mall stores.

Even so, Dastugue said, “our primary growth vehicle will be off-mall stores.” The company will open about 50 new stores per year, he said, and the renovations will proceed at about 70 stores per year. Penney says roughly 20 percent of the new units will roll out in midsize U.S. markets with populations of about 100,000 to 300,000.

LENSCRAFTERS’ LUXE MAKEOVER

To capture more luxury eyewear shoppers, LensCrafters has launched a new prototype that emphasizes its designer merchandise. Wood flooring, fashion graphics and artistic lighting will lend upscale flair; the “fit and finish” stations that are front and center in most existing stores will be hidden from view. All new LensCrafters stores will sport the higher-end design, which launched in April at the 900-store chain’s Fifth Avenue flagship in New York City. LensCrafters is owned by Luxxottica Group, which also owns Ray-Ban and controls the eyewear license for such ritzy brands as Chanel and Prada.

FIRST PLACE FOR FILA

Italian sports brand Fila’s flagship store in New York City won Store of the Year in the National Association of Store Fixture Manufacturers’ annual Retail Design Awards. The 4,000-square-foot store, designed by Giorgio Borruso Design, Marina Del Rey, Calif., has curved metallic elements, elliptical columns and architectural shapes that project a high-energy,athletic image. The benches for trying on shoes feature high-tech gel pads for cushioning, and the ceiling is made to seem “fluid” by means of undulating strips of fabric attached to an aluminum frame.

COLDWATER’S SPA CONCEPT

Coldwater Creek, an apparel chain for Boomer women, is testing its new spa concept, called Coldwater Creek — The Spa. The first unit opened this month at Bridgeport Village, in Portland, Ore. Five more test spas are slated to open by the end of the summer. These are in Lakewood, Colo.; Naperville, Ill.; Santa Rosa, Calif.; Simi Valley, Calif.; and Southlake, Texas. The units, which will measure about 5,000 square feet each, are going up near existing Coldwater Creek stores. Spas targeting the mass consumer have grown rapidly over the past four years. Coldwater’s spas will offer a complete menu of treatments, including massages, facials, manicures and pedicures, but they will also sell apparel and personal care products. “It is premature at this time to evaluate the performance of this new concept,” the company wrote in an SEC filing. “However, we will continue to monitor our customers’ response and evaluate, test and refine our day spas accordingly.”

GAP TO OPEN MIDDLE EAST STORES

Apparel retailer Gap Inc. says it will open 25 Gap and 10 Banana Republic stores in the Middle East by 2010 through a franchise agreement with Al Tayer Group, a conglomerate based in Dubai, United Arab Emirates. The first Gap stores will open later this year, and the first Banana Republic units sometime next year. The locations will include Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates. Al Tayer, which comprises 20 companies and runs Dubai’s largest English-language newspaper and the emirate’s second-largest cosmetics retail chain, has similar deals with Giorgio Armani and Gucci. Gap Inc. owns and operates Gap stores in five countries and Banana Republic units in three. With this venture and some previously announced franchise and distribution agreements for Singapore and Malaysia, the company will expand its global reach with Gaps in 12 countries and Banana Republics in nine by 2010.

CHARLOTTE MAY SELL RAMPAGE

Charlotte Russe Holding says it may put its 66-store Rampage chain up for sale following a $9 million first-half loss. The San Diego-based women’s apparel company also says it plans to open 40 stores in the flagship Charlotte Russe division this year, up from the 35 announced previously. The company operates about 420 Charlotte Russe stores currently. For next year, its plans are to open 50 Charlotte Russe stores.

WHO’S THE POSHEST?

The Bergdorf Goodman division of Neiman Marcus is the most prestigious luxury retailer of 2006, according to a poll of about 500 wealthy U.S. households conducted by the New York City-based Luxury Institute. Second and third place went to Neiman Marcus and Nordstrom, respectively. Respondents voted Nordstrom the retailer with the best ability to make customers feel special.

KOHL’S BIG GROWTH PUSH

Kohl’s Corp. says it hopes to open 500 new stores by 2010, which would expand its base to 1,200. The Milwaukee-based retailer also says it plans to boost net income about 20 percent over the period. Kohl’s set its expansion plans for this year at 85 new stores in the Midwest and Southeast. Kohl’s will fund this growth in part with the $1.6 billion it got for selling its credit card business to JPMorgan Chase & Co. in April.

CARREFOUR EXITS KOREA, GROWS

French retailer Carrefour will sell its 32-store Carrefour Korea division to South Korea-based conglomerate Eland for $1.85 billion, marking a victory for the latter over two powerful competitors. Earlier, Carrefour had entertained bids from Tesco and Wal-Mart. The company entered South Korea in 1996. As of late last year, Carrefour was posting almost $2 billion in annual sales. But Carrefour Korea’s fourth-quarter same-store sales fell 4.7 percent after the South Korean government set restrictions on wholesale activity through retail formats. Eland, which started as an apparel retailer in 1980, owns retailers, restaurants, hotels and information technology firms. With the Carrefour Korea units in its portfolio, Eland will be operating a total of 88 stores in South Korea, including two department stores and 32 supermarkets. Meanwhile, success in Asia, Latin America and at home helped Carrefour post first-quarter sales of $24.7 billion, up 6 percent year on year. In Europe, deflation and a lack of consumer confidence flattened sales everywhere except France, where sales grew 5 percent to $11.7 billion. Carrefour’s Latin American sales rose 8.9 percent to $2 billion, while in Asia they climbed 10.1 percent to $1.74 billion.

J. CREW LAUNCHES MADEWELL

J. Crew’s new concept, Madewell, offers price points 20 to 30 percent lower than J. Crew’s flagship brand, but it is not targeted at teens, executives say. Madewell will differentiate itself from J. Crew with a more casual mix of T-shirts, chinos, and jeans, says Margot Brunelle, vice president of marketing and public relations at the New York City-based retailer. The first Madewell store is set to open at North Park Center, in Dallas, in August. “We’ve had a great customer response to J. Crew in North Park,” Brunelle said. “It seemed to be the logical choice for Madewell.” The lease for a second space, in Los Angeles, is pending, and there is a possible third location in the works for early 2007. The stores will measure about 3,000 square feet. Last year J. Crew reversed a protracted slump with a $54 million increase in net income and a 13 percent rise in same-store sales.

SIMONS EXPANDS IN CANADA

Montréal-based Simons announced plans to open new stores in Toronto and Ottawa. The 159-year-old department store chain currently operates seven stores in Québec.

FEDERATED SELLS STORES TO LANDLORDS

Federated Department Stores agreed to sell 11 mall anchor stores to The Macerich Co. and nine stores to Simon Property Group for an undisclosed sum. The deal leaves Federated with 35 stores left to sell of the 80 duplicate locations marked for divestiture following its acquisition of May Department Stores. The deals involve nine Macy’s stores in Arizona, California, Massachusetts, New Hampshire and Pennsylvania; five Robinsons-May stores in Arizona and California; one Famous-Barr, one Marshall Field’s and two L.S. Ayres stores in Indiana; and one Filene’s store each in Connecticut and Massachusetts.

HOT EXPANSION PLANS

Food court favorite Hot Dog on a Stick is celebrating its 60th anniversary with a plan for steady expansion. The Carlsbad, Calif.-based chain, famous for its fresh-squeezed lemonade and hand-battered corn dogs, has about 100 company-owned stores in U.S. regional malls, with additional franchised stores in the Philippines and Venezuela. Hot Dog on a Stick plans to open five to 10 new stores a year in Arizona, California, Colorado, Minnesota and other markets.

STAR POWER

A celebrity alone will not sell a product, but the “right” celeb may help grab the attention of some consumers who may not have otherwise noticed a product, says Marshal Cohen, chief industry analyst at consulting firm NPD Group. Sears spokesman Ty Pennington, for example, is the celeb most likely to move a consumer into a store, Cohen says, based on a survey his firm conducted to measure the hots and nots in celebrity advertising. A celebrity’s integrity and credibility are key influencers in their effectiveness at marketing, he says. As one survey respondent put it, “I believe Kirstie Alley is working hard to lose weight, that George Foreman knows about healthy grilling, and that Ty Pennington knows his way around home improvement — they are all believable.” Less believable were Kobe Bryant, Paris Hilton, Britney Spears and Donald Trump. These celebs rated high on NPD’s recognition scale, but had a negative influence on a shopper’s habits, meaning consumers said they were less likely to buy products endorsed by those celebs.