J.C. Penney reported a smaller-than-expected quarterly loss on lower ad spending and higher margins, results Chief Executive Jill Soltau said showed efforts to revive sales and profits at the department store are taking hold.

The 117-year-old retailer, one of the worst-hit by the surge in online shopping in the past decade, has been desperate to attract modern shoppers. In August, it partnered with resale clothing company thredUP, adding second-hand women’s clothing and handbags to its merchandising mix. It is also testing a new store to attract customers with everything from a yoga studio, a videogame lounge and lifestyle workshops.

Such efforts are a part of Soltau’s turnaround strategy, aimed at reassuring investors it can lure back shoppers into stores amid fierce competition from online giants like Amazon.com and discount retailers like TJX Cos’ Marshalls and T.J. Maxx chains.

“We are beginning to see results - both in our numbers and how we operate as a business,” Soltau said in a statement.

Soltau, hired late last year from craft and fabrics seller Jo-Ann Stores, is attempting to restore Penney’s roots as a retailer of mid-priced apparel for middle-class families.

Soltau also pushed to stop sales of appliances and limit its furniture offerings, while reducing inventory at stores to boost margins and closing underperforming outlets.

Retail traffic data from analytics firm Placer.ai showed traffic turned positive in August, rising 13.3 per cent above the baseline for the period, above the 7.3 per cent rise in 2018. J.C. Penney’s rivals, including Macy’s and Nordstrom Inc, are also looking to bring in shoppers to new stores with cafes, donut shops, fine-dining restaurants and full bars with Instagrammable views.

Reuters