Ron Johnson left J.C. Penney Co. Inc. in the red, which left some investors blue, and now Myron E. “Mike” Ullman 3rd is hoping for green.

Ullman, returning to the chief executive officer’s perch following Johnson’s departure in April, has faced an uphill battle to turn around a retailer that lost $1 billion in 2012 and saw a 25 percent drop in sales. Ironically, Ullman was Johnson’s predecessor, and was ousted by hedge funder and Penney’s board member William Ackman of Pershing Square Capital to make way for Johnson in his attempt to seek change for the department store chain.

This story first appeared in the December 16, 2013 issue of WWD. Subscribe Today.

To say that Ullman’s last eight months have been turbulent is an understatement. Besides navigating an infrastructure that was largely dismantled during the Johnson era, Ullman had to bring back some of the retailer’s private brands, such as St. John’s Bay and Ambrielle, to re-attract Penney’s former customer and refocus on e-commerce, which had been pushed to the back burner in favor of Johnson’s touted in-store shops concept.

At WWD’s CEO Summit last October, Ullman, who is interim ceo, said on his return that he had to quickly draw up a list of 30 things that needed fixing. “Two-thirds of those things have been fixed,” Ullman reported.

That might have been the easy part.

Beyond the fight for survival, an internecine war began in August when Ackman disclosed publicly that the retailer hadn’t acted fast enough to replace Ullman with a permanent ceo. Ackman also sought the resignation of Penney’s chairman, Thomas Engibous, who fired back, noting that Ullman returned “under unusually difficult circumstances” and that the company had made progress. Ullman and Penney’s ultimately won the war: Ackman resigned from the board and sold his 17.7 percent stake in the firm.

Ullman’s next battle was over Penney’s liquidity, shoring up credit lines and gaining the support of the vendor community. In September, the company said it was doing a secondary stock offering to raise $932 million. That, plus cash on hand and the undrawn portion of its credit facility at the time, allowed Penney’s to project $1.3 billion in overall liquidity at yearend.

Meanwhile, Wall Street remained concerned about Penney’s cash-burn rate. But last month, when Penney’s posted a wider third-quarter loss — $489 million versus $123 million a year ago — Ullman optimistically told analysts, “We’ve turned the corner,” explaining that turnaround efforts were “beginning to take hold.” Improved sales trends were in men’s and women’s apparel and fine jewelry. Sales at were up 25.3 percent in September and 10.8 percent in August. Further, he said the company expects to deliver “positive comps in the fourth quarter.”

“We’re restoring initial markups necessary to support the return [to a] promotional department store strategy. The environment, as you know, is very aggressively promotional, and we must and will compete to win,” said Ullman. As such, the company has been running frequent promotions to make good on that promise.

Still, Penney’s has bumps ahead. This month, it disclosed in a regulatory filing that the Securities and Exchange Commission is taking a close look at its September stock offering. And uncertainty remains regarding Martha Stewart products in the legal battle with Macy’s Inc. Under a modified agreement, Penney’s will sell a narrower range of Stewart goods, and also sold its 11 million shares in Martha Stewart Living Omnimedia Inc. back to MSLO.