J.C. Penney Expands Online With 2 New Sites

PLANO (AP) - Department store operator J.C. Penney Co. said Thursday it plans to collaborate with Hearst Magazines on two new online ventures as it starts a new unit devoted to finding new revenue streams.

J.C. Penney and Hearst will be partners on a site called Gifting Grace, targeted at gifts for women ages 30 to 54, and Clad, which will offer designer menswear for men age 25 to 54.

The sites are slated to begin operation in the summer of 2011. They will be supported by magazine and online ads in Hearst publications such as Good Housekeeping, Redbook and Esquire.

The sites are the first two projects from J.C. Penney's new growth brands division. J.C. Penney, based in Plano, said the unit will be devoted to finding "high potential opportunities in the retail sector."

The ventures are separate from the company's core J.C. Penney brand and include both retail store and digital ventures.

Department stores were hard hit during the recession as consumers cut spending and shopped mainly for necessities. In response, J.C. Penney has cut back on inventory and started offering more exclusive brands to lure shoppers into stores.

Penney in August reported a second-quarter profit as it benefited from tight inventory controls and exclusive store-label brands. Revenue was nearly flat at $3.94 billion. The company lowered its forecast for the year on expected continued weak consumer spending.

Last month, activist investor William Ackman said his Pershing Square Management had taken a nearly 17 percent stake in J.C. Penney. Ackman has agitated for major changes at retailers he holds stakes in, such as Borders Group Inc. and Target Corp.

J.C. Penney shares slipped 20 cents to $32.47 in morning trading.

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