The battle over who will take ownership of J.C. Penney is over. Now the fight really begins.

Last week, the paperwork was finally signed and the beleaguered department store—one of America’s great retail brands, which has fallen into borderline irrelevancy—finally emerged from bankruptcy with new owners. A consortium of two of the country’s leading shopping mall operators and a host of private equity players have carved up the Penney pie, beating out a surprisingly robust number of other interested suitors in a pattern contrary to some other retail bankruptcies where the players couldn’t wait for the liquidation sales to begin.

For the mall operators, the move is obvious. They get to keep Penney paying rent (which, by the way, they will now be paying to themselves), while also keeping the lights on at the big box at the end of the mall. For the money guys, who bought in for the physical assets more than the intellectual property or racks of merchandise, they get buildings and structures that can be converted if things eventually go south. (Think: distribution centers, community colleges and, for all we know, bowling alleys.)

All of this makes sense, but it still leaves one big question: What do you do with Penney to make it a viable, successful and ultimately relevant retail business? It is no small question.

The chain comes with certain built-in pluses. It retains an incredibly loyal customer base (albeit one that is shrinking and continually aging out). It has relatively good real estate, especially as it continues to close its marginal stores—a process that may eventually end up reducing 800-plus units down to 600. And it does have a merchandising structure in place—creaky and in need of modernization as it is—that will allow the company to hit the ground running no matter what direction it proceeds in.

On the downside, Penney occupies a certain middle ground in retail—not as high-end as other department stores, not as affordable as Walmart—that’s only getting less desirable. It is not only stuck at the end of the mall, it’s stuck in the middle.

Curiously, a big part of its salvation may be in its home business. Of all the big national retail chains, Penney has historically had the highest percentage of its overall sales come from its home furnishings business, particularly soft goods. At one time—and it wasn’t all that long ago—one-third of all the window coverings bought in America were purchased from the company, and its private-label home brands are stronger than many other store labels. With the home category surging right now, market conditions play to the store’s sweet spot.

The retailer needs to build on these attributes—putting more emphasis on its proprietary brands, beefing up its e-commerce operation and improving its in-store presentation will all help. So, too, will getting more exposure for its quality-control programs, which have historically been among the best in the business.

Of course, there’s so much more Penney must do better at—but then, it’s clear the company was well aware of that. Many improvements were in evidence in a test store the chain opened last year in the Dallas–Fort Worth marketplace—an outpost complete with a coffee shop, fitness studio and barbershop, as well as a boosted visual merchandising budget. With its ownership now settled, one hopes there will be financial resources to expand that program to more locations.

J.C. Penney began life as a small Wyoming dry goods store called The Golden Rule, opened in 1902 by James Cash Penney. More than a century later, those dry goods—home and apparel fashions—remain the key to its ongoing existence.

Homepage photo: A JCPenney store in a Florida mall | Shutterstock.com

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Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.