Updated from 5:06 P.M. EST to reflect changes in stock price in the eighth paragraph.

NEW YORK ( TheStreet) -- J.C. Penney ( JCP - Get Report) shares soared following reports that Ron Johnson is stepping down as the company's CEO, but had given up most of their gains following the announcement of Mike Ullman as the new CEO. The departure was first reported by CNBC.

J.C Penney announced that Myron (Mike) Ullman, III, would be rejoining the company as CEO and will join the Board of Directors. Ullman had been CEO of the company until late 2011.

Activist investor William Ackman, who sits on the retailer's board of directors, who castigated Johnson publicly on Friday at a Thomson Reuters conference in Boston, said criticism of the retailer's CEO amid falling sales and a slumping stock price "is deserved."

J.C. Penney has been struggling in recent months to try to turn itself around, as the retailer faces decreasing revenue and concerns about plans to stay afloat, given mounting debt.

Johnson was made CEO in November 2011, and investors had expected the wunderkind former Apple Inc. store designer could work some of his magic at a retail chain desperately seeking a 21st century makeover. Vendors had been tightening credit while private equity firms had been circling, according to industry sources.

J.C. Penney shares, which had lost 55% in the past 12 months months, closed at $15.87 in regular trading on Monday.

J.C. Penney's numbers have been dismal. For the quarter ended Feb. 2, the company reported a 28% decrease in sales to $3.9 billion while comparable store sales dropped 32% and Internet sales declined 34% compared to the same period a year ago. The company reported net loss of $552 million for the quarter.

Shares had been down as much as 11% following the announcement of Johnson's departure, but later reversed those gains. The stock was recently down 2.96% to $15.40 in after-hours trading according to Nasdaq.com.

-- Written by Chris Ciaccia and Richard Collings in New York

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