Kohls.com

NEW YORK (Reuters) - Kohl's Corp (KSS.N) is set to open more new stores in 2011 than it originally planned, citing more favorable conditions and availability in the commercial real estate market.

The mid-tier U.S. department store operator, which operates 1,089 stores, had originally planned to open 30 new stores next year but now intends to open 40, Chief Financial Officer Wes McDonald said on a call with analysts.

Many of them will be in the smaller format that it is testing near urban centers -- such as one set to open next year across the Hudson River from Manhattan in Edgewater, New Jersey -- and are designed to help Kohl's build market share.

The smaller stores are typically 64,000 square feet, rather than 90,000. About 100 of Kohl's stores are currently in the smaller format.

"There are a lot of densely populated markets in which there is a lot of real estate available," Chief Executive Kevin Mansell told Reuters in an interview.

"What this enables us to do is have more flexibility in how we can grow our market share."

The retailer on Wednesday reported a third-quarter profit that was in line with Wall Street estimates, and forecast sales at its stores open at least one year would rise between 2 percent and 4 percent during the holiday quarter.

Mansell said that sales gains among department stores would largely have to come at each other's expense, citing the tentative recovery in consumer spending.

"We have an improving consumer who is spending modestly more than last year," he said, noting that overall consumer spending was still well below 2007 levels.

Like other department store chains such as Macy's Inc (M.N) and J.C. Penney Co Inc (JCP.N), Kohl's has offered more exclusive and private label merchandise in a bid to give shoppers a reason to go to frequent one store over another.

Mansell said on the call that those lines, which include Simply Vera Wang and Dana Buchman, had risen to 48 percent of sales during the third-quarter.

Kohl's shares were up 1 percent in afternoon trading. (Reporting by Phil Wahba; Editing by Derek Caney, Dave Zimmerman)