J.C. Penney (OTC:JCPN.Q) has solved a big problem in that it at least has a new chief executive officer. Jill Soltau, who most recently served as CEO of Jo-Ann Stores Inc., takes over Oct. 15, and she inherits a bit of a mess.

The retailer has struggled to enact a working turnaround plan. It has lost its CFO, who had been part of a management group serving as interim CEO after the previous leader, Marvin Ellison, left to take the same job at Lowe's.

When Ellison left, the company was in a precarious position. It had stabilized a bit in the most-recent quarter, posting a 0.3% gain in comparable-store sales, but net sales fell by 7.5%, and the company lost $101 million ($0.32) per share.

As the chain's new CEO, Soltau has to figure out how to right the ship. That's not an easy task, because her predecessor made what seemed like the right moves, and they mostly have not worked.

The exterior of a J.C. Penney store.

J.C. Penney has made some moves that should have worked but don't appear to have. Image source: J.C. Penney.

What has J.C. Penney done?

In many ways, the struggling retailer followed much of the blueprint that helped Best Buy turn its business around. The company tried to give consumers reasons to come to its stores by adding store-within-a-store Sephora locations, an improved salon, electronics, toys, and baby departments.

It also revamped much of its merchandise and has added numerous private-label brands -- a move that has been a key part of Target's revival. Along with those customer-facing changes, J.C. Penney has also improved its supply lines, improved its omnichannel capacities, and revamped how it handles inventory.

Those are the right moves. The company has entered markets left open by the demise of Toys R Us and the slow death of rival Sears. Somehow, however, these changes have not resonated with consumers.

That suggests that Soltau has bigger problems to address than just merchandise mix. There's clearly a disconnect between J.C. Penney and consumers. That might be fear over the brand's survival possibilities, or it could simply be that the company has fallen behind stronger rivals in the department store space.

How risky is J.C. Penney stock?

The company has roughly $8 billion in assets and the same amount in liabilities. It has roughly $350 million in cash and cash equivalents as well as $2.8 billion in inventory. 

J.C. Penney has not received the public pushback from suppliers over fear of not getting paid that Sears has. In addition, J.C. Penney has not issued any official warnings about its ability to survive as an ongoing concern as Sears has.

That does not mean the company is not on shaky ground. The new CEO takes the helm at a time when it's too late to do very much to impact the company's holiday plans. That means Soltau has to hope her chain makes it through the season in a strong enough fashion that she gets all of 2019 to right the ship.

That outcome is not assured. A bad holiday selling season could spook vendors and banks, placing a squeeze on the company, perhaps making it hard for the new CEO to get enough money to make meaningful changes.

Soltau has to convince customers that J.C. Penney is a modern, thriving chain that's worth visiting. That's going to be a major challenge for a retailer that has struggled for relevance since former CEO Ron Johnson basically told its core customers they weren't important.

The new CEO might get one last chance to save the brand, but even that is not assured. This is a desperate situation. And while I personally shop at J.C. Penney and believe in what Ellison did, Soltau has to figure out how to make other customers feel that way too.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.