Who would have thought that by bringing in Ron Johnson, the retail genius who created the immensely successful Apple Store over a decade ago, to lead J.C. Penney (NYSE:JCP), the company would be on its knees and flirting with insolvency just a year into his tenure?\

The simple fact is no one did. Profits were projected to climb to the stratosphere as the 100 year old department store entered the 21st century under the leadership of a visionary tech retailer. Alas, it was not to be. By pivoting away from coupons, sales, and good deals on quality clothing, J.C. Penney alienated the very customers that made it successful for so many years. 

It was only by going back to the basics that J.C. Penney was able to avert bankruptcy, under the leadership of former CEO Mike Ullman who actually came out of retirement to save the chain he captained for so many years. We're still in the early innings of what is sure to be a long road back to prosperity for the company, but there is, however, hope. The company recently reported strong same-store sales growth for the third quarter of fiscal year 2016 of approximately 5% and projects that it will be free cash flow neutral this year. A laudable achievement given that the word bankruptcy was not far from analysts' minds just two years ago.

Here's what else investors need to know about the turnaround process and just where J.C. Penney stands today.

Sean O'Reilly has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.