Last week, JCPenney (JCPN.Q) unveiled a renovated concept store in Hurst, Texas. The company's executives gleaned data and insights from a year-plus of customer research to build out its experimental and modern store. CEO Jill Soltau said of the new location, "This store is more than a renovated location, it is the fullest articulation of our customer-centered strategy, an investment in our future and a lab to inform decisions to return JCPenney to sustainable, profitable growth."

Meanwhile, the company continues to face many headwinds, including heavy competition, e-commerce disruption, and changing consumer preferences. At the same time, the company is grappling with a sizable debt load that prevents it from investing in its assets, even as comps and sales continue to decline -- JCPenney hasn't delivered quarterly revenue growth since the 2017 holiday season.

Investors have reacted to these ongoing problems by sending shares of JCPenney down to new lows. In the last six months, shares have traded below $1 at times, leading to fears that the company could face delisting from the NYSE.

Apparel displays from inside the new JCPenney store concept

Image souce: JCPenney

Can an improved retail experience and new executives revive the 117 year-old department store?

Soltau has made improvements since she took over at the struggling department store in late 2018. For example, she reduced inventory by 12.5% in the second quarter of 2019, and her decision to exit the appliances segment was a smart one, given the category's low margins. Now, she's masterminding a retail lab and concept store to actively test out customer centric amenities like a clubhouse for children, fitness classes, cooking demonstrations, coffee shops, and hair and makeup workshops. Shoppers at the Hurst store have appeared impressed by the updates, praising the cleaner layout and improved look.

That said, JCPenney has attempted many turnarounds in the last few years as $3.6 billion of debt weighs down its balance sheet. Declining same-store sales also remain a problem, and these are tough issues, especially given the secular challenges facing all brick-and-mortar retailers. Thus far, the company has managed to service its debt and avoid bankruptcy, but management's guidance for full-year 2019 has comps declining 7% to 8% (after the 3% reduction last year).

There are too many headwinds to recommend the stock

Despite management's efforts to revive this business, including the new Hurst location, there are just too many risks to recommend picking up shares, even as a deep value play. If the holiday shopping season disappoints for JCPenney, the company could have trouble meeting its debt obligations in the coming months, with $105 million of unsecured debt maturing in June 2020. And if its share price continues to hover around the $1 mark, the company will face delisting unless it pursues a reverse stock split.

While the efforts to eventually spruce up its store base with the insights from its new Hurst experiment are a step in the right direction, it will take significant time for JCPenney to update enough locations with new amenities to win back shoppers and move the needle on sales and comps. And if consumer spending softens, JCPenny has even less flexibility to execute its turnaround.

Overall, this stock is best left alone. There are other retailers better positioned to stay relevant and gain market share in the fast changing and competitive retail environment.