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Associated Press, Published April 08 2013

JC Penney ousts CEO Ron Johnson after turnaround strategy fails

NEW YORK — J.C. Penney's board of directors has ousted CEO Ron Johnson after only 17 months on the job as a risky turnaround strategy backfired and led to massive losses and steep sales drops.

The department store chain said late Monday in a statement that it has rehired Johnson's predecessor, Mike Ullman, 66, who was CEO of the department store chain for seven years until November 2011.

The announcement comes as a growing chorus of critics including a former Penney CEO, Allen Questrom, called for his resignation as they lost faith in an aggressive overhaul that included getting rid of most discounts in favor of everyday low prices and bringing in new brands.

The biggest blow came Friday from his strongest supporter, activist investor and board member, Bill Ackman, who had pushed the board in the summer of 2011 to hire Johnson to shake up the dowdy image of the retailer. Ackman, whose company Pershing Square Capital Management is Penney's biggest shareholder, reportedly told investors that Penney's execution “has been something very close to a disaster.”

On Saturday, Ullman received a phone call from Penney's chairman Thomas Engibous asking him to take back his old job, according to Penney spokeswoman Kate Coultas. The board met Monday and decided to fire Johnson.