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Penney CEO's Challenge: Is It Even Fixable?

"(The board) chose stability and experience, in my mind," said Antony Karabus, president of SD Retail Consulting. "Instead of big, grandiose ideas, what they need now is someone to stabilize and execute effectively. He has a calm way about him. If anyone can do it, he can, because he knows the business. He knows the customers."

Bud Konheim, president of designer fashion brand Nicole Miller, which has sold an affordable version to Penney since 2005, agrees.

"(Ullman) is very smart. Everybody loves him. He's a strong executive but he's not a bull in the china shop," he said. "He's not as much show biz as Ron Johnson. He flies under the radar."

Still, there are concerns. Penney struggled under Ullman's first regime, though the company was still profitable. Ullman brought in Penney's first mini-shops, including 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 shopping experience or to attract new customers.

That showed up in the sales figures. During Ullman's previous tenure, from December 2004 to October 2011, sales declined from $18.18 billion in 2004 to $17.6 billion in 2010, his last full year at the company. Sales per square foot dropped to $155 from $177, according to Deborah Weinswig, an analyst at Citi Research.

When Ullman left Penney in November 2011, the situation wasn't great. But it also wasn't the crisis it is now. The company's credit ratings are deep into junk status. Its stock has lost 67 percent of its value since February 2012 when investors bullish on Johnson's grand plans drove the price up around $43. That makes it that much harder for Ullman to turn business around.

History also dictates that the odds are against a sales recovery. Last fall, Credit Suisse surveyed 17 retailers that reported annual declines of anywhere from 15 percent to 25 percent in a single year from 2000 to 2011. Of that group, only four retailers recovered the lost revenue â¿¿ Abercrombie & Fitch Co., Ann Inc., Guess Inc. and Barnes & Noble Inc. â¿¿ and it took an average of three years to do so. The rest were either acquired by a private equity company, went bankrupt or merged with another public company.

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