J.C. Penney, the department-store chain working to rebound from a $985-million loss, said Tuesday its sales decline slowed in September and that the improvement will last through the end of the year.

Sales at stores open at least 12 months fell 4 percent in the fiscal month ended Oct. 5, the Plano, Texas-based company said. Same-store sales dropped 12 percent in the quarter ended Aug. 3.

Chief executive Mike Ullman is working to turn the chain around after his predecessor's failed attempt to transform J.C. Penney into a destination for younger, wealthier shoppers.

Ullman has reinstituted sales events, revived popular private-label brands such as St. John's Bay and tried to clear out slow-selling merchandise from the chain's home sections, all while raising cash through borrowing and a share offering to shore up the retailer's balance sheet.

Ullman "has been restoring the core assortments that the J.C. Penney customer has been accustomed to seeing," said Mary Ross Gilbert, an analyst with Imperial Capital LLC in Los Angeles.

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The company, which raised $785 million in cash from a share sale last month, said it expects to have more than $2 billion in liquidity at the end of the fiscal year.

The retailer said getting its renovated home departments running has been "more challenging than originally planned." It is revamping the sections' merchandise, pricing and layout after the previous strategy failed to catch on.

The home departments were a centerpiece of a plan by former CEO Ron Johnson to turn J.C. Penney's stores into collections of boutiques. They began selling designer goods such as $60 toasters from architect Michael Graves and big-ticket items including a $1,695 chair from Happy Chic by Jonathan Adler.

"The concept didn't take off because Penney's traditional customers didn't want contemporary furnishings at higher price points," said Bernard Sosnick, an analyst with Gilford Securities in Manhattan.