NEW YORK (Reuters) - Department store chain J.C. Penney Co Inc said it would launch a line of home goods by supermodel Cindy Crawford later this year, at a time when shoppers are cutting discretionary purchases.

The merchandise, ranging from bedding and bath items to wall decor and rugs, will be available exclusively at Penney stores in September, the company said on Friday. Penney, which bills the line as affordable, said it would offer promotional prices for some items, like $23.99 for decorative pillows and $169.99 for a queen comforter set.

Furniture store chain Raymour & Flanigan already sells a line of furniture designed by Crawford.

Penney, like other department store chains, has been facing sagging sales in past months as consumers cut spending on items such as furniture and apparel in the recession.

Still, Penney has said it will try to capture market share by touting unique brands and wooing customers who used to shop at rivals that are now bankrupt, such as Linen 'n Things.

"This will ensure that when the market turns, we will maintain our advantage as a leader in the home business," Penney President Ken Hicks said in a statement.

Penney shares were up 12 cents, or 0.6 percent, at $22.09 on the New York Stock Exchange.

(Reporting by Aarthi Sivaraman; Editing by Lisa Von Ahn)