US mid-market department store chain JC Penney is scaling back its expansion plans this year, as it faces tough trading in an uncertain economic outlook.

The retailer had said it would open 50 stores this year, but has cut this figure to 36 in a move that will save US$200 million (£101 million) in capital expenditure. The stores will not be in mall locations, because street outlets are performing better than branches at shopping centres.

JC Penney chief executive Mike Ullman said: “I’ve been in the business 39 years [and] I don’t think I’ve seen an environment as unpredictable as the current environment.”

Earlier this month, JC Penney unveiled a fall in like-for-like sales of 12.3 per cent for the five weeks to April 5, with declines in most categories. However, the recently launched Sephora cosmetic shop-in-shops bucked the negative trend with strong increases.

Edward Whitefield, chairman of research house MHE Retail, said: “What’s happening at JC Penney is very much part of the mid-market. The US consumer is in recession and is cutting back, so the mid-market is hurting. Companies such as Wal-Mart and Target, because they have the lowest prices, are maintaining positive like-for-likes.”

JC Penney is putting its faith in private labels. Last week, it revealed it would launch a furniture and home accessories range called Linden Street and a teen fashion line called Decree, as well as expand its lingerie line Ambrielle.