But Johnson's strategy led to sputtering sales and spiraling losses. The initial honeymoon with Wall Street ended soon after customers didn't respond favorably to his changes. Johnson revised his strategy several times in an attempt to bring back shoppers, with little success.
The turnaround plan was closely watched by industry observers who wanted to see if Johnson could actually change shoppers' behavior. The plan failed. And now worries are mounting about the company's future.
Penney's stock price Monday evening showed investors' frustration with Johnson and it's uncertainty about Penney's future. When news began to leak after the market closed that Penney was ousting Johnson, the stock, which had closed at $15.87 in the regular session, climbed nearly 13 percent to $17.88 in after-hours trading. But after Penney announced Ullman would take over, the stock reversed course, falling as far as 11 percent from its regular closing price, to $14.10. That was 21 percent off its after-hours high.
Johnson's future at Penney became uncertain after the department store retailer reported dismal fourth-quarter results in late February that capped the first full year of a transformation plan gone wrong. Penney amassed nearly a billion dollars in losses and its revenue tumbled almost 25 percent from the previous year to $12.98 billion.
Under Johnson, 54, Penney ditched coupons and most of its sales events in favor of everyday low prices. It's bringing in hipper designer brands such as Betsey Johnson and updating stores by installing specialty shops devoted to brands such as Levi's to replace rows of clothing racks.
Johnson's goal was to reinvent Penney's business into a trendy place to shop in a bid to attract younger, wealthier shoppers. The plan turned off shoppers who were used to heavy discounting. Once-loyal customers have strayed from the 1,100-store chain. It hasn't been able to attract new shoppers to replace them.