In 1898, James Cash Penney began working for a small chain of stores called the Golden Rule stores. Impressed by his work ethic and salesmanship, the owners of the store offered him one-third partnership in a new store they had opened. They went on to open 2 more stores together.

In 1907, when the other 2 partners dissolved their partnership, Penney purchased full interest in all 3 stores. By 1929, the business expanded and the number of stores reached 1,400.