Ullman faces tough task at JC Penney Mike Ullman, chief executive of JC Penney from 2004 to 2011, had not set foot in one of the retailer's shops since he left. He did not want to encroach on his successor Ron Johnson, an Apple veteran who was brought in to reinvent the stodgy department store. But Mr Johnson's plans triggered a disastrous fall in sales and on Saturday Mr Ullman got a call from Thomas Engibous, JC Penney's chairman. He wanted him back in his old job. Mr Ullman got the all-clear from his wife and agreed, then headed off to a store to see how JC Penney had changed since he had been away. Speaking to the Financial Times after his reappointment as chief executive was announced on Monday, he said his impression was that it was "well-merchandised," but added nothing else. Asked what went wrong under Mr Johnson, he said: "I really haven't spent a lot of time thinking about that." But now Mr Ullman's task is to stabilise a business that alienated shoppers and lost 25 per cent of its sales - or $4bn - in the past year, setting off alarm bells over its ability to pay its bills and survive. He said his objective was restoring "profitable growth," but admitted he did not yet have a plan for doing so. The stock market did not welcome Mr Ullman's return. JC Penney shares fell 10.3 per cent to $14.23 on Tuesday, reflecting doubts over how a chief executive who was seen as a problem (and was eased out to make way for Mr Johnson) could now be the solution. A research note from Morgan Stanley was titled "Out with the New, In with the Old." Mr Ullman's reappointment also highlighted a bigger problem for bricks-and-mortar retailers. As they struggle with cautious shoppers, an excess of stores, insufficient ecommerce and rising manufacturing costs, it is hard to find good chief executives. Wall Street needs convincing old chief has new ideas When Mike Ullman left JC Penney in late 2011 to make way for his much-vaunted replacement, the department store was regarded by most analysts as being in slow decline. Ron Johnson, his successor, described the 110-year-old chain as "tired" when he unveiled his revival plan in January 2012 and noted bitingly: "We're fine with growing old, we're not fine with growing stale." JC Penney had been lagging its peers in sales and profitability, but Mr Ullman presented a more upbeat picture of those times when he spoke to the Financial Times late on Monday. People are allowed to characterise things as they wish . . . but it wasn't because we had a flawed strategy. We had to weather the downturn," he said. Mall traffic was sluggish and times were tough after the financial crisis, he said, but there was also a lot of "newness" in the stores during his seven years. Mr Ullman launched JC Penney's first shop-in-shops - Sephora cosmetics in 2006 and Mango fashion in 2010 - diversifying the store environment. Mr Johnson was extending this strategy. Mr Ullman also closed down the group's outdated catalogue business. But the 10 per cent share price tumble caused by news of Mr Ullman's return indicates that Wall Street will need a lot of convincing that he has new ideas. "The leadership model in the business is changing drastically," said Les Berglass, chairman of Berglass & Associates, an executive search group. Traditionally retailers have promoted chief executives from the ranks of merchants, the people who spot the next hot products. But now they need leaders who can also create a cohesive store brand, develop ecommerce to compete with Amazon, and manage complex international supply chains. "The days of taking the first violinist and making that person the orchestra leader are over," Mr Berglass said. Best Buy, the embattled electronics retailer, is in the midst of its own turnround plan after Hubert Joly, an executive with little retail experience, was appointed as its head last August. Toys R Us is looking for a new leader after the toy retailer announced in February that Jerry Storch would step down following a fall in sales during the Christmas shopping season. At Sears Holdings, which was the US's sickest department store until Mr Johnson arrived at JC Penney, chief executive Lou D'Ambrosio left in February and was replaced by Eddie Lampert, the hedge fund manager who controls the company. At JC Penney, another hedge fund manager, Bill Ackman of Pershing Square Capital, was instrumental in using his near-18 per cent stake to eject Mr Ullman and install Mr Johnson. The failure of Mr Johnson's 17-month experiment with lessons from Apple's retail shops - simplified pricing, less cluttered stores and fresh merchandise - is a blow to Mr Ackman's credibility. Paul Winum, a senior partner with RHR International, a consultancy, said boards needed to have emergency replacements lined up. To have to go back to Mike Ullman suggests the board did not have a good emergency plan. Gilbert Harrison, chairman of Financo, an investment bank, said "it's going to be very hard to find the proper replacement" for Mr Johnson, but he said Mr Ullman was the "right choice" in the interim because he had the respect of JC Penney employees. Other analysts said it was important that Mr Ullman knew JC Penney's manufacturers, because nervous suppliers often tip troubled retailers into bankruptcy by constricting orders and tightening payment terms. Mr Ullman said he was comfortable with the idea that he was preparing JC Penney for somebody else to lead, but he said that would take time. I think in this case there's some pretty hard work to [be done to] get it on the right trajectory.