Foundering retailer J.C. Penney needs "a big turnaround" and is running out of time to get it right, Macquarie's Liz Dunn said Thursday.
Asked who might be able to turnaround the company's fortunes, Dunn said it was difficult to say.
"That's premature," she said. "It's hard for me for me to react to that, but I think it would need to be someone who has experience with sort of the moderate-income consumer, has experience with couponing, has experience with merchandising and marketing and can really be a confidence-inspiring leader for the vendor community and the lender community."
Dunn added that it might not be easy to find a new chief executive.
"It definitely would be a big challenge," she said. "I don't know that anyone who's sitting in a cherry seat right now would want to take on this leadership position and potentially redefine their own legacy."
Sources told CNBC that the company was looking for a new CEO to replace Mike Ullman, who took the helm after the departure of former Apple executive Ron Johnson.
Former CEO Allen Questrom said on "Fast Money" that he would consider returning under the right conditions.
"He's a retail legend, and I think that is very positive news, but we've got a lot to do between now and when a new CEO will be named," Dunn said. "I think they've just got a couple of quarters more before things start to get really bad for them, so it's a quick turn that needs to be executed here, and we don't even have a CEO name who's going to replace Ullman."
But even the possible return of Questrom wasn't enough to improve the outlook for the company, she added.
"I'm still waiting and watching," Dunn said. "If Allen Questrom does come back as chairman, I do think that's going to be a positive for the vendor community and just something that will shore up their confidence, but really this is a big turnaround that they need to execute."
She said a new CEO faced substantial obstacles.
"I think some of the capital improvements they've made to the store are actually hindering their ability to turn the business around because the store is kind of configured in weird ways that don't lend itself to selling what they traditionally sold," Dunn said. "I'm not any more confident today hearing this news."
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