PLANO, United States — When J.C. Penney Co. announced this month that it would shut 40 U.S. stores, At Home Group Inc. saw an opening.

Executives at the retail chain, which sells home decor in warehouses and other large spaces, checked the list of targeted stores and called J.C. Penney within a few hours to express interest in buying some of them. It helps that At Home had already researched J.C. Penney’s more than 1,000 U.S. locations ahead of time, just as a shopper would gear up for a big sale.

“When they make that announcement, we already know the ones we want,” At Home Chief Executive Officer Lee Bird said in an interview. “That’s our Black Friday.”

In this era of shuttered storefronts and sluggish mall traffic, a handful of companies like At Home are taking advantage of the upheaval. As department stores and big-box chains increasingly focus on smaller stores, At Home is doing the opposite. Its 125,000-square-foot (11,600-square-meter) locations aim to wow customers with dizzying variety. Pottery Barn might have 60 types of rugs; At Home offers 600.

In addition to scouting the J.C. Penney locations, the company has added former Target, Sam’s Club, Sears and Kmart stores over the past few years. Bird and his team are expanding carefully, though. At Home, which is backed by private equity, collects data on store fleets and assigns a score to each location based on potential annual sales. So when a promising Sears store goes on the block, it doesn’t take long to spring into action.

Moving Fast

At Home, which was called Garden Ridge until last year, has 81 locations -- 20 of them in Texas. The chain added 18 of them last year, including one at a former J.C. Penney in Arizona. It also took over eight Kmart stores and a Sears location. Once the old department store vacates the premises, At Home can renovate the space and move in within four months of closing on the real estate.

“We do deals really fast -- nobody wants to be jerked around,” said Bird, 50. “We’re at the point where we’re one of the first people they call.”

Bird, a former executive at Gap Inc. and Nike Inc., expects to have hundreds of stores in the U.S. by the time the current expansion is complete. At Home plans to add as many as 20 new locations this year and will boost the store count 20 percent annually for the "foreseeable future," Bird said. Sales are growing at about the same pace, the company said.

The chain is owned by AEA Investors, a New York-based private-equity firm that bought the business in 2011. At Home wants to go public eventually, though there’s no timetable for that.

Vying With Churches

At Home, based in Plano, Texas, doesn’t just scavenge stores from existing chains. It built five new locations in 2014 and has leased space when necessary. But Bird’s preference is to buy shuttered stores because it takes less time to get the new At Home location up and running.

Over the last two years, he’s found himself bidding against churches and data centers for space. Not many fellow retailers are interested.

“It’s been a while since there was a retailer that was looking for that much space and is growing,” said D.J. Busch, an analyst at Green Street Advisors in Newport Beach, California. “Coming out of the downturn, a lot of retailers started looking at their stores and realized they were saturated in certain markets.”

At Home is a throwback in another way: It doesn’t sell its products online. The company relies on old-fashioned foot traffic to drive revenue in an era when consumers are shopping more on the Internet and making fewer trips to the mall.

Doomed Malls

The e-commerce shift has contributed to the hollowing out of America’s malls -- even as broader consumer spending rebounds. Green Street estimates there are as many as 1,100 malls in the U.S., and the firm expects about 15 percent to close or be repurposed over the next 10 years. The closing of several Sears Holdings Corp. stores at the end of last year pushed the vacancy rate at regional malls to 8 percent, the first quarterly increase since 2011, according to the property- research firm Reis Inc.

At Home still sees vast expanses of retail space as a good thing. Bird wants the brand to be known as a one-stop shop for decorating projects, with as many as 50,000 items available in the massive warehouses. The thrill of the hunt is part of the appeal, he said.

At Home competes with chains such as TJX Cos.’ HomeGoods, Restoration Hardware Holdings Inc., Pier 1 Imports Inc., Williams-Sonoma Inc.’s Pottery Barn and the Container Store Group Inc. The home-decor market is worth about $30 billion in the U.S., and no company controls more than 2 percent of the industry, Bird said.

Establishing Authority

Still, going up existing competitors won’t be easy. And smaller store formats are expected to get more popular in 2015, said Virginia Morris, vice president of global consumer and innovation strategy at Daymon Worldwide, a retail consulting firm in Stamford, Connecticut.

To succeed with the big-box approach, At Home will have to sell consumers on its selection, she said.

“You have to be an authority or an expert -- otherwise you blend into that sea of sameness and you don’t drive the trip,” Morris said. “You have to have a strong proposition to drive traffic.”

After Bird left Nike in 2009, he started researching At Home, then called Garden Ridge, with an eye toward teaming up with a private-equity firm on a buyout. He visited 30 of the company’s 50 stores and noticed something: There were Mercedes, Land Rovers and other expensive cars in the parking lot.

Though an earlier deal to buy At Home fell through, Bird came away intrigued by the business and confident he could expand it across the U.S. When AEA bought the company, the investment firm called Bird and he took over in December 2012.

“We’re the only people going after big boxes right now,” he said. “It’s contrarian, but for us it works great.”

By Craig Giammona. Editors: Nick Turner, Kevin Orland.