JC Penney sales rise as company borrows strategy from Target

I've heard of retailer J.C. Penney (NYSE: JCP) doing things recently like expanding stores outside malls in an effort to compete better with retailer Kohl's and the company's most recent results add the aggressive strategy Penney's apparently has onto the success of several of its fashion initiatives.

The retailer saw a 13% increase in first-quarter income which it reported a little over a week ago based on increased sales of exclusive fashions. Late last week, the retailer even upped its profit outlook for 2007. Is Penney's making the right moves to ensure sustained competitiveness and profitability? From all appearances, yes it is. And price has little to do with it -- the retailer is focusing on branding (exclusive brands) and upper-scale advertising (combined with a sense of "discountedness") to drive sales.

Sound like any national discount retailer you know? That's right -- to a point, I believe Penney's is trying to duplicate pieces of Target (NYSE: TGT) strategy -- and so far, it's working. Getting fashions on the shelves more quickly is precisely what has led to recent success for Penney's (inventory control must have improved drastically), and it's something that Wal-Mart has failed to do recently that led to a sales miss on its part. If Penney's can continue to execute on what is working and drive newer strategies that lead to what customers respond to, it's in for a win in 2007. But, the retail war is always taking on new battles. No rest can ever be given, right?