The board for the beleaguered Plano, Texas, company said Ullman "is well positioned to quickly analyze the situation J.C. Penney faces and take steps to improve the company's performance," The New York Times reported.
Ullman sat in the CEO's chair for seven years before Johnson was brought in 18 months ago to engineer a turnaround.
The newspaper said Penney's shares initially rose 10 percent in after-hours trading but then reversed direction and were down 6 percent from Monday's close, which was less than half its pre-Johnson era level.
Johnson, who formerly headed Apple's retail efforts, will be remembered for doing away with Penney's penchant for discount sales in favor of every-day low prices only to do an about-face and , but revived them when it turned out customers liked sales. He also backed away from a three-tiered pricing strategy customers found confusing and pirouetted on the company's advertising strategy, the Times said.
Last week, investor Bill Ackerman of Pershing Square Capital Management, the company's largest shareholder, said Johnson had erred by making abrupt changes in pricing and merchandising without first running market tests to see how customers would react, MarketWatch reported.
"It's an unmitigated disaster," Hedgeye analyst Brian McGough told MarketWatch. "The board should probably hand in their own resignation as well. It's a wrong time to fire the guy. They are six months too early or six months too late."