"I truly believed that he had until holiday 2013," said Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisers. "Today's announcement is an indictment of his strategy."
Under Ullman, the chain brought in some new brands such as beauty company Sephora and exclusive names like MNG by Mango, a European clothing brand. But he didn't do much to transform the store's stodgy image or to attract new customers. He's expected to serve mostly as a stabilizing force, not someone who will make changes that will completely turn the company around.
"What they need is a little bit of stability and essentially adult supervision," said Craig Johnson, president of Customer Growth Partners, a retail consultancy. "(Ullman) did nip-and-tuck surgery. But this was a place that needed radical surgery."
Sozzi said he thinks that Ullman will serve only as an interim CEO. He expects the Plano, Texas, company's board to hand off the job to another executive who may want to take the company private.
Ullman is getting a base salary of $1 million and the company didn't sign an employment agreement, according to a Securities and Exchange Commission filing.
Johnson's removal marks a dramatic fall for the executive who came to Penney with much fanfare. There were lofty expectations for the man who made Apple's stores cool places to shop, and before that, pioneered Target's successful "cheap chic" strategy by bringing in products by people such as home furnishings designer Michael Graves at discount-store prices.
Few questioned Johnson's savvy when Penney hired him away from his job as Apple's retail chief in June 2011 to fix a chain that had gained a reputation for boring stores and merchandise.