Penney announced Wednesday that Ullman, 57, would replace Allen Questrom, who had indicated he would not stay beyond his current 5-year contract — and now apparently will leave nine months early.

Questrom oversaw a turnaround now in its fourth year that included closing weak stores, remodeling others and offering more fashionable merchandise to mid-price ranges.

Customers and investors have responded. Sales at stores open at least a year are up 6.8 percent over a year ago, and the company's stock recently hit a 5-year high.

"I was impressed with the job Allen and the team have done in turning the company around the last four years," Ullman said, explaining his interest in the job during an interview with The Associated Press.

Ullman said Penney can keep growing by continuing to build new stores away from malls, by staying focused on fashion and by increasing Internet sales. "Right now I only know upside opportunities," he said.

It's a stark contrast from Ullman's rise to the top job at R.H. Macy & Co. in 1992. The iconic retailer was staggering under the weight of a disastrous leveraged buyout.

Richard Hastings, a retail analyst at the Bernard Sands credit-advisory firm, said Ullman helped stabilize the chain until it was acquired by Federated Department Stores Inc. — led at the time by Questrom.

Hastings said Ullman's background as a department-store CEO and more recently as a senior executive with luxury retailer LVMH Moet Hennessy Louis Vuitton gave him a breadth of experience that would prove helpful at Plano-based Penney.

"Ullman is going into a positive situation, so it's a good fit," Hastings said.

Ullman stopped short of saying Penney would try to reach luxury shoppers, but he said even midlevel chains can learn from the way that upscale stores succeed through marketing and image, not just cutting prices.

Questrom was chairman and CEO of Barneys New York when he took the top job at Penney in September 2000. At the time, Penney was losing sales to discounters and other rivals. He overhauled the department stores and sold the struggling Eckerd chain of drugstores for $4.5 billion. Last year, Penney posted its first sales increase in several years.

The timing of Wednesday's announcement caught analysts off-guard. Questrom said in an interview that he had planned to finish his contract, which runs until September 2005. However, he said, he decided to retire early when the company had a chance to hire Ullman, calling him a tough competitor. Questrom said he would have no formal role with Penney after Ullman takes over.

Questrom said the board narrowed six or seven finalists to Ullman and Vanessa Castagna, Penney's CEO of department stores, but that Ullman's broader experience and background as a CEO was decisive.

Castagna, a former executive at Wal-Mart Stores Inc. who joined Penney shortly before Questrom did, had widely been seen as the leading candidate for Questrom's job. She had signed deals with designers to create a buzz around Penney and guided remodeling of many stores, but she had never run a company.

Castagna declined to comment Thursday, a spokesman for the company said.