An ad for the JC Penney Manhattan store
An ad for the JC Penney Manhattan store - 
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Kai Ryssdal: New Yorkers take their shopping pretty seriously. Even when they're not doing a whole lot of it. Like right now. Until the recession really took hold, big names like Saks and Bloomingdales and Macy's ruled the retail scene with giant stores and high-end merchandise. Now a mid-priced chain with humble, Midwestern roots is setting up shop in Manhattan hoping financially-strapped New Yorkers might take notice. Kaomi Goetz reports.


KAOMI GOETZ: For weeks JC Penney has been taunting Macy's.

AMIE VALENTINE: The real miracle is now on 33rd street.

And...

VALENTINE: Our neighbors must be shaking in their over-priced boots.

That's Amie Valentine, creative director for Saatchi and Saatchi. It's the firm behind Penney's multi-million dollar ad campaign. She says the ads were intended to speak to New Yorkers, like New Yorkers.

VALENTINE: New Yorkers make a point with humor and a little bit of aggression, and that's the tone that we took. But I think if it was pure aggression that's no fun. It's with a wink.

Tomorrow, Penney's opens its first store in Manhattan's Herald Square. Right in Macy's back yard. That's, well, aggressive.

PENNY AD: We're stepping up our style, New York. Be the first to get great brands.

Penney's is moving into Manhattan at a time when big retailers like Macy's, Saks Fifth Avenue, and Bloomingdales have been pummeled by the recession. Consumers who are still shopping have become addicted to deep discounts.

Mike Boylson is head of marketing for Penney's. He says he knows what Penney's is up against in taking on Macy's on its home turf.

MIKE BOYLSON: We're kind of the underdog, we're the new kid on the block, we're the smaller store. There are two things that I will guarantee, though, our competitors and customers will know we're there, and we will take market share out of that area.

Penney is counting on the weaker economy to help it succeed. Analyst Kimberly Greenberger of Citigroup says affluent shoppers are trading down

KIMBERLY GREENBERGER: We are seeing a consumer who is receptive to shopping at a lower price, maybe a lower than she's ever shopped at before.

Greenberger says Penney's can win these new customers if it can shed its lackluster image.

The Manhattan store will carry trendy fashion lines by celebrities like Charlotte Ronson. Sephora, the make-up chain, has set up shop inside the store. The dressing rooms have velvet curtains and framed mirrors. And with a nod to Manhattanites, who don't like to cart lots of packages around, Penney's will deliver in-store purchases anywhere on the island for $15.

Tourists and harried workers buzzed around Herald Square last week, as the finishing touches were put on the store. Colleen Steele was visiting from Philadelphia. She says she hasn't been in a JC Penney store in years. But she could be lured back.

COLLEEN STEELE: Maybe, look, I love to shop, I'll look at any store, if I like something I like it, it's not just the name of the store for me, it's the clothing, the service, all that means a lot.

Heather Couture -- yes, that's her name -- wasn't as impressed. She says Penney's is a place where her mom shops.

HEATHER COUTURE: I mean everyone knows JC Penney's but people don't go to New York to shop at Penney's. You know what I mean?

Couture may stay away, but Penney's is betting its shiny Manhattan store and lower prices will be a strong mix. The store will also give Penney's a jump on the competition. Nordstrom opens discount store Nordstrom Rack in Manhattan next spring.

In New York, I'm Kaomi Goetz for Marketplace.