The new stores, most of which will open on off-mall sites, is acontinuation of the company's expansion into open-air real estate."Our off-mall format allows us to enter communities that may nothave shopping malls, but where there is significant demand," saidMyron Ullman, J.C. Penney's chairman and chief executive officer,during the retailer's fourth-quarter conference call.

Of the company's 1,033 units, 640 are currently in malls. Thenon-mall stores are in neighborhoods that get more weekday traffic,while the mall units get a majority of their business on weekendsand other key shopping days, Ullman says.

During the company's fourth quarter, same-store sales were up2.2% year over year. For all of 2006, same-store sales rose 3.7%.Management predicts a low-single-digit increase for the currentfirst quarter and the remainder of the 2007 fiscal year.