The U.S. economy may be stumbling, but J.C. Penney Co. Chairman and CEO 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.
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, from women's and men's clothing to home furnishings, shoes and luggage. The merchandise, which started arriving in stores over the past few weeks, reflects the Ralph Lauren aesthetic - pink cotton polo shirts, floral bedspreads and madras shorts, for example. 
"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, while dresses are priced at about $100. That's about 15 percent higher than the department store's top tier clothing brands like Liz & Co. and Jones Wear. "It helps diversity our business by reaching customers and new channels of distribution," said Roger Farah, president and chief operating officer of Polo Ralph Lauren (RL), in an address to investors Wednesday. 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 actual product and is responsible for inventory and the selling of the merchandise. 
Ullman emphasized that the economic slowdown is a time to come out with exciting new merchandise. With the American Living brand, Penney's plans to add new categories like women's outerwear and infant clothing for fall and will unveil large and petite sizes for spring of 2009. The merchandise will be available online at jcp.com on Feb. 19. and in-stores Feb. 24. "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." (NEW YORK -(AP)CNNmoney.com)
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