Shares of JC Penney (NYSE: JCP [FREE Stock Trend Analysis]) spiked Tuesday, rallying nearly 3%, after rumors swirled that CEO Ron Johnson was set to resign. The rumors were significant enough to solicit a response from the company, which said that Johnson had “no plans” to leave.

Despite the denial, JC Penney shares were still up on the session.

Johnson took the reigns of the ancient retailer in 2011, with the goal of reforming how the company did business. First, he did away with coupons and sales, instead opting for an “everyday low pricing” strategy similar to Walmart (NYSE: WMT). At the same time, he shifted the company's advertising strategy, pushing edgier ads.

But both strategies are widely believed to have failed, as JC Penney's same-store sales and earnings have dropped significantly over the last year. Johnson removed Michael Francis -- the head of the new ad campaigns -- last summer, and has begun reintroducing limited sales and some discounting.

Those who believe Johnson is running the company into the ground may want to see him gone. Former JC Penney CEO Allen Questrom told CNBC last week that the company's board “needs to act” soon.

Still, Johnson's turnaround strategy is just partially complete, removing him could leave the company in a state of limbo: Not quite the “new JCP” Johnson promised, but unable to go back to the old JC Penney.

Shares of the retailer traded near $15.50 Tuesday, up over 3% on the session.


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