Struggling department store retailer JC Penney has said it is making "solid progress" with its turnaround efforts, despite reporting a 4% decline in September comparable store sales.

The company, which is working to stabilise its business after a previous turnaround failed, said women's apparel - its largest business - reported positive sales last month. 

Women's and men's apparel, fine jewellery and women's accessories are performing better than the company average. Online sales jumped 25.3% last month and 10.8% in August.

Gross margins continued to be impacted by clearance of leftover inventory from the first two quarters of the year, higher levels of clearance units sold during the period, as well as the company's transition back to a promotional pricing strategy during the second quarter.

Units per transaction and average transaction values in September were above last year, while average unit retail was below last year.  

"Reconnecting with our customers and getting them into our stores is a top priority," said CEO Myron (Mike) Ullman in a statement today (8 October). "Our enhanced messaging is reminding shoppers that JC Penney's offering of trusted private brands, key national brands and unique attractions sets us apart from the competition."

Over the last six months, Ullman said the retailer has made "significant strides" with its turnaround efforts and is now seeing "positive signs" in spite of a difficult trading environment.

"While pleased with the improving trends and more predictable performance, we are still in the early stages of the turnaround and will maintain a relentless focus on achieving our long-term goals for the benefit of our customers, associates and shareholders," he added.

JC Penney said it raised US$785m from a public offering of 84m shares of its common stock. The company's year-end liquidity is now expected to be in excess of $2bn, taking into account the net proceeds from the offering, as well as the previously disclosed expectation of $1.3bn of year-end liquidity including the undrawn portion of the its credit facility.  

Analysts had previously warned that the company could be bankrupt by Labor Day (2 September) if it continued to lose money at its current rate.

Over the last few weeks, the group has appointed Scott Laverty to executive vice president and chief information officer, Jan Hodges to senior vice president and general merchandise manager of Home and Katheryn Burchett to senior vice president of property development.

"Although there remains significant work to be done, the experience, talent and drive of our team is allowing us to confront our challenges head on and take swift and effective actions to address them.

"We are all dedicated to continuing the momentum underway and restoring JC Penney to a leadership position in American retail. It will take time, but we are on the right path with a sound strategy and achievable goals."