A bedtime story...

Once upon a time, three large but rickety tubs were bobbing about on the deep blue ocean. The year was 2000, and although they had passed through some remarkably fair weather, the skies were beginning to darken, and it was clear that foul weather lay ahead.

Once the pride of the fleet, the merchant ships Kmart, Sears and Penney had fallen into disrepair. They were creaky and slow compared to the newer models, and they'd begun to take on water. Before the year was out, each would turn to a new captain.

In the two years since, as we all know, each has charted a different course, not all of them successfully. Only J.C. Penney Inc. has managed to navigate around the economic shoals. And although it is just entering the third year of its five-year turnaround plan, it stands out among the three as the one with the wind in its sails.

Captain Allen Questrom and his crew deserve a lot of credit for what they've accomplished in a relatively short amount of time: crafting a streamlined centralized buying operation out of the chaos of the previous store-oriented system, overhauling a store-direct shipping platform in favor of hub-and-spoke customer service center program (which will be complete when the last of 13 centers comes on line in June), and integrating its planning, allocation, merchandising and marketing operations.

Penney still faces some mighty challenges. The nation's 8th largest retail company and second largest home textiles retailer remains largely a mall-based operator (for JCPenney stores) in an era when independent boxes appear to be the power format. Only 5 percent of JCPenney's 1,049 stores are "A" units, and the company can afford to upgrade only another 30 this year. It also has limited access to debt markets and no access to commercial paper — previously its source for assuring peak working capital needs. That situation has at times forced it to defer some capital spending and seek out opportunistic financing, which it has done to the tune of some $1.48 billion since 2001.

But what really makes Penney stand out among its fellow sailors on the high seas is its commitment to a vision — something that Kmart (now pursuing its second grand strategy in two years) and Sears (which has been cobbling together its strategy piecemeal) haven't yet fully navigated.

Malls are dead? Not so, says Questrom. They're where our customer shops, and we're going to be the dominant moderate retailer in that channel.

Big book catalogs are history? We don't give up on things. We find ways to make them work.

Shouldn't Penney focus more on basics? Our team understands fashion, our customer wants fashion and we're going to be first to market with fashion.

"We don't change our strategy every time the wind blows," Questrom told analysts last week at the company's annual conclave in Texas. "Our most important issue has always been proper merchandise assortments. This business is about making incremental changes and being committed to a strategy."

And so JCPenney has opened its sails and pointed its bow toward the North Star. Although Sears and Kmart may eventually reach the riches of the New World, there's almost no doubt about Penney. And Penney will get there first.