J.C. Penney Co. made a radical break with tradition by hiring Silicon Valley wunderkind Ron Johnson as chief executive officer. With Johnson gone, the chain may have to pursue even more radical options, such as selling itself.

After suffering a 25 percent annual sales decline, J.C. Penney yesterday ousted Johnson, 54, and replaced him with his predecessor, Myron E. Ullman III, 66. Investors, who pushed the shares up 13 percent on news that Johnson was out, abruptly sold after learning Ullman was the new CEO. J.C. Penney dropped 8.3 percent to $14.55 at 7:47 a.m. in New York.

Ullman faces several tough choices. He'll have to decide whether to continue Johnson's strategy of turning the chain into a collection of boutiques or return to a more traditional department-store model. Ullman will also have to consider whether to sell the company or break it up, said Dave Larcker, a corporate governance professor at the Stanford Graduate School of Business in Stanford, California.