File photo of Ron Johnson, CEO of JC Penney, in Dallas on Sept. 10, 2012 ( Brandon Wade-Invision for JCPenny -AP Images)
The train wreck that was Ron Johnson's tenure at J.C. Penney (JCP) is over.

Johnson has stepped down from the top spot nearly 18 months after charging in with big plans to overhaul the retailer and its long-established business model.

His predecessor, Myron Ullman, is returning to lead the company. Investors initially applauded the move, sending shares up more than 12% in after-hours trading Monday. Later in the evening, shares fell back to an 8% loss.

Johnson's resignation brings to an end one of the more extraordinary business upheavals in recent memory. He made a name for himself leading the retail efforts of Apple (AAPL) and also held a top management position at Target (TGT). He was envisioned as a savior of sorts, and promised to return Penney to profit and make it a fashionable and exciting place to shop.

Johnson tried nixing sale events in favor of everyday low prices, and almost immediately found resistance from shoppers accustomed to Penney's couponing and discounting culture. He boldly revised the company's advertising, eschewing value propositions in favor of sparsely elegant and stylish displays that confused customers because they didn't show prices.

Investors watched in horror as Penney's stock price plummeted more than 50%.

Penney's board grew restless and perhaps rebellious at the end, cutting Johnson's 2012 pay by some 97% in a display of dissatisfaction. His cash salary was the same, but the cuts came from stock awards and bonuses. Johnson's final weeks as CEO were also marred by a costly legal battle with Macy's (M) over who had the right to sell Martha Stewart-branded products.

Recent regulatory filings show that Johnson was guaranteed a $150,000 payout if he resigned or was fired, Business Insider reports. Business Insider initially reported a $150 million payout, but issued a correction later.

It's unclear whether Johnson quit or was fired by the board. More details will likely emerge soon as Penney tries to move away from the Johnson era. But the questions that surrounded Penney when Johnson came on board are still there, and perhaps even sharper now. Can J.C. Penney survive? Can it appeal to its core customers, and attract new ones, without discounting itself into bankruptcy?

Observers reacted quickly to news of Johnson's departure on Twitter. "The key thing is this: $JCP is dead," wrote asset manager Jeff Macke. "I think it might be too great a job for anyone," wrote CNBC's Jim Cramer.

Others defended Johnson. Wall Street "is too impatient and doesn't understand how long it takes to turn around a business," wrote one. "He had a solid vision," wrote another Twitter user. "Sometimes it's too difficult to change a brand image though."

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