JCPenney’s back-to-school season is looking up.
The struggling retailer’s same-store sales — or sales at stores open at least a year, a crucial retail metric — have recently swung into positive territory, sources told The Post.
Bolstered by a fresh wave of TV ads and promotional events, Penney’s same-store sales currently look poised to increase in August, insiders said.
“The downward spiral appears to be ending,“ according to one industry insider.
Store traffic has improved significantly “in the past week or two,” according to another source close to the department-store chain.
Insiders estimate traffic may be up as much as 5 to 10 percent as parents have begun to shop for back-to-school clothing.
“July was really terrible, no question,” one source said. “But a lot of that is because they weren’t advertising. They were saving it for now.”
Penney didn’t respond to requests for comment.
Industry sources warned that the bounce hasn’t proven its momentum and isn’t dramatic enough to reverse the damage done last year by former CEO Ron Johnson, who sent third-quarter sales plunging 26 percent as he banned coupons and sales events.
Analysts and investors lately have fretted that if sales don’t improve soon, Penney might face a fresh liquidity crisis despite a recent $2.25 billion financing package.
To shore up its balance sheet, investors have speculated that Penney might soon be forced to issue as much as $1 billion in new stock — a move that could severely dilute current shareholders.
Still, the recent uptick is a ray of light for Penney in the critical fall and holiday seasons, even as the retailer’s board emerges from a vicious battle with Bill Ackman, the activist investor who is Penney’s biggest shareholder with an 18-percent stake.
Ackman, who left the board Monday after going public last week with a push to oust CEO Mike Ullman, had raised concerns about Penney’s dwindling cash pile as summer business sputtered.
In a securities filing this afternoon, Ackman said he hasn’t sold any of his stake, but will review it “on a continuing basis” while reserving the option to sell “some or all” of it.
According to industry sources, Penney appears to be getting some traction on pricing as Ullman returns to a traditional discounting and coupon strategy.
“Earlier this year they were marking down jeans to $10 from $20 just to clear them out of the store,” according to an industry source. “Now they’re starting to get back to marking them down to $20 from $40.”
The perk-up stands in contrast to the previous three months. Next week, analysts expect Penney to report a second-quarter same-store sales drop of 8 to 10 percent.
If the trend continues through this weekend, Penney will be “in a good position to report that back-to-school is going well,” according to a source.
Separately yesterday, Macy’s reported worse-than-expected second-quarter earnings, but said business has improved significantly this month.
Penney shares finished yesterday up 43 cents, or 3.4 percent, to close at $13.11.
jcovert@nypost.com