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J.C. Penney's reality check

September 20, 2012: 12:38 PM ET

Maybe Ron Johnson should have stayed at Apple (AAPL). The J.C. Penney (JCP) CEO continues to struggle to get the retailer on the right track.

Johnson, who helped launch hundreds of retail stores for Apple, succeeded Mike Ullman as CEO of J.C. Penney last year. And investors had high hopes that he'd be able to swiftly turn things around for the retailer, which has been flailing with weak sales and an image problem

Just Wednesday, Johnson did a walk-through of J.C. Penney's new 'store within a store' concept with some 300 analysts. And he was pretty upbeat about how the shops were faring, which initially gave investors something to cheer about. But the stock did an about face, when Johnson said the second half of the year wouldn't look much different from the first half.

To be fair, it's a tough time for retailers everywhere.

And in Johnson's defense, he inherited a 110-year-old retail chain that was in desperate need of an overhaul so it is clearly going to keep going through some growing pains. "The goal has always been to transform it," Johnson told analysts Wednesday.

StockTwits traders aren't convinced he's got it right just yet.

dschorrnyc: If you're in a stock that needs presentations & speeches to stay afloat, be vewy vewy careful. $STUDY $JCP

firstadopter: $JCP up 40%+ off lows and CEO admits current biz still sucks as bad as earlier this year yesterday. How can you still long this POS?

Liquid_Trader: $JCP ~ The hype machine failed to impress. The plans wont work IF they keep the same staff. total revamp of JCP staff culture must change.

That may be true, but overhauling the culture at any company takes a loooonnggg time. "What J.C. Penney is creating is a new interface," said Johnson, comparing the retailer's transition to Apple's iPhones.

In the meantime, investors should buckle up. The stock is down 25% since January.

Market_Bull: $JCP shares are like riding The Beast at Cedar Point.

Still, Citigroup (C) is still upbeat about JC Penney's future, reiterating its 'buy' rating on the stock. "We're fired up following a sneak peek of the new JCP prototype store," wrote Citi analyst Deborah Weinswig, in a research note. "JCP is clearly not out of ammo."

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Catherine Tymkiw
Catherine Tymkiw
News Editor CNNMoney

Catherine Tymkiw is a news editor at CNNMoney where she helps oversee breaking news coverage and futures planning. Previously, she was the investing editor. Prior to joining CNNMoney, she was the online editor at Crain's New York Business and has nearly two decades of reporting and editing experience. She tweets @ctymkiwcnn

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