In a report published Tuesday by Standard & Poor’s, the ratings agency compares the recovery plans of Sears Holdings Corp. (NASDAQ: SHLD) and J.C. Penney Co. Inc. (NYSE: JCP) and finds that the latter is performing better.

J.C. Penney has reversed course entirely, eliminating the more upscale strategy of former CEO Ron Johnson, and returning to its prior strategy of discounting merchandise and re-introducing private label brands. As the S&P analysts say, “[J.C. Penney] is now shifting its business back to a promotional model to halt the bleeding and regain lost customers.”

By contrast, Sears has tried to transform itself into a quasi-membership retailer through a free customer loyalty points program. This is not an unqualified success, as S&P notes:

Despite the investments, however, overall revenues continue to decline. Additionally, the costs of Shop Your Way points compounded with traditional promotional discounts, giving rise to double promotional costs, have led to compressed gross margins.

In S&P’s view, though, what the companies do is probably less important than how the economy performs. Whether either or both is successful “may depend on relevant factors that are outside their control.”

So far, both have had some success in the capital markets and have been able to buy more time for the turnarounds to take hold. The coming holiday season could be a decisive time for both.

In trading Tuesday, J.C. Penney stock was down about 2% to around $9.25, in a 52-week range of $4.90 to $11.30. Sears stock traded up 2.7%, at $29.90 in a 52-week range of $24.10 to $67.50.

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