PLANO, TX-Though Federated Department Stores executives expect to complete the re-branding of Macy’s into a national chain next month, Myron Ullman, chairman and chief executive officer of J.C. Penney, says he’s not worried. The longevity of J.C. Penney and its lower price point from Macy’s will keep the company on track, he says.

About 400 stores that Federated acquired from May Department Stores last year under the banners of Marshall Field’s, Strawbridge’s and others will be converted next month. “They are saying that they are the first national department-store chain, which is kind of interesting, since we’ve been a national department-store chain for 104 years,” Ullman said during the company’s second-quarter conference call.

While Macy’s will have larger national footprint, J.C. Penney is also experiencing growth. Executives plan to open 50 new stores per year, most of them stand-alone units, from next year through 2009. Of the 28 new units scheduled to open this year, 25 are planned for the third quarter alone. Capital expenditures for the year are projected to be $800 million.

Ullman says the company is considering sites at 400 locations to grow its store base during this time period. About two-thirds of those sites are not part of mall developments he says, keeping with the company’s recent strategy of opening off-mall units. A majority of its 1,021 current units are attached to malls.

During the second quarter, J.C. Penney’s same-store sales rose 6.6% year over year, the 13th quarter in a row they have increased, executives say. Operating profit shot up 27.2%, to $271 million, while total sales were up 6.5%, hitting $4.2 billion.

Despite its strong quarter, management says they expect same-store sales for the second half of the year to come in at the low single digits, citing the current economic environment.

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