It's hard to find many people who love J.C. Penney (NYSE: JCP) these days. Recently, Standard & Poor's dealt the department store company a blow when it dropped its credit rating, reflecting "performance that was weaker than we expected over the past year."

S&P said the outlook on the company is stable, but it noted that the new "fair and square" pricing plan and the merchandising strategy that go with the rest of the company's transformation plans will cause more weak performance at least until the end of the year. And then it's only going to stabilize, not trend up sharply, as the retailer would have us expect.

That's the gist of the Penney's argument. A lot of its future depends on a very fickle public. It has made a good show of presenting its case to Wall Street, arguing the "fair and square" plan won't seriously erode profits because it's not really dropping prices that far beyond clearance prices. And it's made the case that it can fund the merchandising overhaul from free cash flow.

Fool Austin Smith recently declared Penney's ripe for a turnaround. But is the market going to give the company time to reinvent itself? And will shoppers get it?

I'm afraid the answer to both questions is: probably not.

There isn't much reason to be optimistic about the simple pricing plan. The public just doesn't go for that.

Shoppers have been trained to expect sales and clearances. Penney's CEO Ron Johnson acknowledged in the latest earnings report that sales in February were "trending below last year," especially in those days where there were discounts and coupon events last year.

Retraining the American shopper is not an easy thing, especially after three years of brutal recession that's trained the lower-income consumer to shop generic and buy only what's on sale.

A recent Harvard Business School article argued against Penney's odds of success. It quoted a professor of retailing as saying it could take three years for the strategy to pan out. Anyone who follows retail stocks knows no one gets that much time from shareholders.

Don't be surprised if when the holiday season rolls around, Penney's discreetly adds some specials or friend-and-family shopping events. That will be the thin edge of the wedge.

The merchandise changes are a better bet. As Ikea and H&M have proved, shoppers will go for designer knockoffs at bargain prices.

Penney's is trying to position itself as the cheap-chic alternative, a sort of Target (NYSE: TGT) of mid-priced department stores. It's no coincidence CEO Ron Johnson -- a former Target exec -- just hired a second former Target marketer, Brian Robinson, as VP of collaborations -- the guy in charge of bringing brands to the stores. Penney's chief marketing officer, Mike Francis, is also a former Target exec.

The problem is, there already is a Target, and it already does the cheap-chic thing quite well. Putting the band back together is not enough.

Is there room for Penney's? Yes, as the economy improves, the people who would shop there will have more disposable income to spend on Martha Stewart sheets or Mango sweaters.

As Austin noted, the company is cash rich, which gives it a cushion to live through the changes. But on the down side, its P/E ratio is a hefty 50, and it's trading at the high end of its 52-week range, so it doesn't make sense to buy into it now. S&P analyst Mike Junz also said the company is unlikely to do share repurchases.

Since Penney's has quit reporting monthly sales numbers as part of the changeover, it'll be hard to tell how it's working out until the first-quarter numbers come out, which will include Valentine's Day and Easter sales, giving a good idea how the pricing is working out against the competition.

But the real test will be the back-to-school season in summer. That's second only to the holiday season in terms of sales and profits for most retailers.

If I were a Penney's investor, I'd hold on until August to make up my mind. If the economy is sailing forward, it may pull off the changes. But I'm not an investor, and I think there are other plays in retail that require less faith in the public's ability to change its ways.

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