Sears Holdings Corporation (SHLD): This Retailer Might Be in Worse Shape Than J.C. Penney Company, Inc. (JCP)

But as one department store to another, J.C. Penney’s business seems to be in a better position going forward. Now former CEO Ron Johnson blew through roughly $1 billion on the job, but all that money didn’t go to waste.

J.C. Penney Company, Inc. (NYSE:JCP)’s remodeled stores (particularly the new home goods sections) look amazing. At the same time, while he was at J.C. Penney, Johnson was able to attract exciting new brands like Joe Fresh.

Compare that to Sears Holdings Corporation (NASDAQ:SHLD), whose stores have largely languished. Management has come and gone, and the business itself seems to be drifting aimlessly.

Although both stocks are fairly risky at this point, J.C. Penney at least has some building blocks in place for a turnaround.

Investing in Sears

There’s a common belief held among market participants that Sears Holdings’ CEO (and hedge fund manager) Eddie Lampert only bought into the company as a real estate play. Yet, as venture capitalist Marc Andreessen quipped, perhaps that real estate wasn’t so valuable after all.

Both Sears and J.C. Penney are struggling department stores. Of the two, I think J.C. Penney Company, Inc. (NYSE:JCP) is more attractive, as it at least has some exciting building blocks in place for a turnaround.

Sears Holdings Corporation (NASDAQ:SHLD) might have some value as a play on the US housing recovery, but in that case, investors seem to be better off buying SHOS.

If Sears can return to profitability, the stock could come roaring back, as a company — once left for dead — turns it around. Yet, at this rate, it’s hard to envision such a scenario playing out.

Joe Kurtz owns shares of J.C. Penney Company. The Motley Fool has no position in any of the stocks mentioned.

The article This Retailer Might Be in Worse Shape Than J.C. Penney originally appeared on Fool.com.

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