J.C. Penney's revolution comes to a bloody end

April 8, 2013: 6:18 PM ET

J.C. Penney ousted its embattled CEO Ron Johnson and replaced him with someone investors are all too familiar with: former JCP CEO Myron Ullman.

By Jennifer Reingold, senior editor

Ron Johnson during happier times at Fortune's Brainstorm Tech conference in 2012.

Ron Johnson during happier times at Fortune's Brainstorm Tech conference in 2012.

FORTUNE --  J.C. Penney's year of living dangerously is over. Once known for its middle-America, mainstream clothes and furnishings, the $13 billion retailer became a virtual petri dish for one of the fastest, most radical reorganizations the business world has ever seen.

Now, the company confirms, its architect, Apple store creator Ron Johnson, is out after a year in which the company lost an astonishing $4 billion of sales and saw its stock price cut in half. His replacement? Myron "Mike" Ullman, the former Penney CEO -- and the man Johnson and his private equity supporters, Bill Ackman of Pershing Square and Steven Roth of Vornado, helped push out.

Ullman, Ackman, and Roth could not be reached for comment, but the company's chairman, Thomas Engibous, said in a press release: "We are fortunate to have someone with Mike's proven experience and leadership abilities to take the reins at the company at this important time."

It's an ironic statement at best. Just a year ago, Ullman's tenure was regarded as mediocre, as JCP stock stalled along with its same-store sales. Smelling opportunity, Ackman and Roth together bought 36% of the stock in late 2010 and pushed the board for a new leader. They found it in Johnson, a retailing wunderkind who helped bring design to Target (TGT) and was responsible for much of the look and feel of the Apple (AAPL) store, which is now the most profitable store in the world.

But J.C. Penney was no Apple. Johnson started with a bang, announcing that the sales Penney's customers knew and loved were not "fair and square," and stopped couponing virtually cold turkey. It didn't work -- and by the time Johnson retrenched and actually had products on the shelves to match his jazzy ads, it was too late. Other missteps included a messy, still unresolved legal dispute over the company's attempt to steal Martha Stewart from Macy's (M) and a decision by Johnson to commute from California and allow many of his senior executives to do the same.

No one can accuse Johnson of not having guts, but one has to wonder just what the board was thinking when they allowed such a radical plan to go forward without any way to pull back when the customer rebelled. Now, hat in hand, the board has returned to the boring, steady CEO that it allowed to step down as chairman just over a year ago. So much for radical change.

Earlier in Fortune:

Wall Street wears the pants at Sears and J.C. Penney

Transcript: JC Penney CEO Ron Johnson

Ron Johnson: Retail's new radical

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