J.C. Penney’s new President and CEO, Marvin Ellison, moves to the legendary retailer from Home Depot. He’ll be the third CEO in less than four years and he’s got a tough job in front of him: Making J.C. Penney relevant again.  

But before we get into J.C. Penney’s future, it’s worth remembering its past. Once upon a time, department stores were where you went for a bargain, says Ira Kalb, a marketing professor at UCS’s business school.

“I know that when I was in high school, my friends went there to buy underwear,” Kalb says. “So they went to J.C. Penney to buy things [that] were not fashionable items but items where they could save money.”

J.C. Penney still fills that niche and still has a loyal following of mostly older, female bargain hunters, Kalb says. So what’s the problem? Well, the world of bargain retailing has radically changed since Penney’s heyday.

“Now there’s a lot of competition at that low-end,” Kalb says.

He says JC Penney needs to re-brand itself because Wal-Mart and Target now dominate that market.

Finding a niche to attract new low-to-middle-income consumers is difficult, says Richard Church, of Discern Investment Analytics.

“The obvious challenge is how do you retain a customer in a slower growth economic world,” he says.

Consumers are buying more online and they’re shifting their spending to gadgets from clothes. While Church admires the new CEO, he’s skeptical about whether Ellison can bring sexy back to Penney’s.

“Anybody who says that Penney needs to be sexy, I believe is not looking at the picture correctly,” says Gilford Securities retail analyst Bernie Sosnick. Penney’s went searching for sexy and it nearly destroyed the company, he says. Now, after a rough couple of years, it’s rediscovering its identity and getting its footing again.