NEW YORK — The U.S. economy may be stumbling, but J.C. Penney Co. Chief Executive Myron "Mike" Ullman III believes its biggest brand launch ever -- an exclusive line with Polo Ralph Lauren Corp. -- couldn't happen at a better time.
"We think given this competitive climate, we are very well positioned to take market share," Ullman said.
The brand, American Living, is expected to be a billion-dollar business in the next few years, accounting for 5% of the department store chain's annual sales, Ullman said. It spans 40 categories, including women's and men's clothing, home furnishings, shoes and luggage.
The merchandise, which started arriving in stores over the last few weeks, reflects the Ralph Lauren aesthetic, including pink cotton polo shirts, floral bedspreads and madras shorts.
"American Living will lift the overall look and feel of the store," Ullman said. Women's blazers under the American Living brand retail for about $160, and dresses are priced at about $100. That's about 15% higher than the department store's top-tier clothing brands like Liz & Co. and Jones Wear.
"It helps diversify our business by reaching customers and new channels of distribution," said Roger Farah, president of Polo Ralph Lauren. As part of the alliance, Global Brand Concepts, a new division of Polo Ralph Lauren, owns the trademark for the brand and oversees the design, sourcing and production, while Penney's owns the product and is responsible for inventory and sales.
Since taking over in 2004, Ullman has spearheaded a store-expansion plan while developing more upscale, exclusive labels with designers like Nicole Miller and home furnishing expert Chris Madden.
Last year, the Plano, Texas-based company launched a successful store label lingerie brand called Ambrielle. Penney's has also scored with its Sephora cosmetics shops within its stores. Such initiatives have helped the department store steal market share away from rivals such as Macy's Inc.
Ullman emphasized that the economic slowdown is a time to come out with exciting new merchandise.
"When people find something they like, they respond to it," Ullman said. Even in tough times, "it's a reason to come to the stores."