J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future

Rehired in April 2013, Myron E. "Mike" Ullman III was brought back to stabilize the retailer's business. Under Ron Johnson's "Fair and Square" program, sales had declined rapidly and quarterly losses and expensive capital investments had put severe pressure on cash reserves. Ullman decided to combine "Fair and Square" everyday low pricing and high/low pricing to reverse the negative trend. For example, to welcome people back to its stores, J.C. Penney ran deep discount sales for Mother's Day and Veteran's Day. By November 2013 the retail stores posted positive sales comparisons year over year, the first time since December 2011. However, margins remained low and Wall Street was wondering if J.C. Penney was sacrificing margin to drive store traffic. Would 2013 holiday sales be strong enough for J.C. Penney to begin building stronger margins? Would another strategy have been more effective? Did the board dispose of Johnson too quickly? Was it wise to bring back Ullman? Can J.C. Penney get back on its feet?