JC Penney Board Can’t Be 'Delusional': Ex-CEO

Former JC Penney CEO Allen Questrom told CNBC on Wednesday that the company's board of directors is wrong in thinking the struggling retailer can change its fortunes under current boss Ron Johnson.

"The board has to take action. They can't be delusional like Ron Johnson is," Questrom said on "Fast Money Halftime Report."

"This has been going on long enough. You can't say you're going to make your numbers for the year and then drop a billion dollars."

(Read More: JC Penney Fires 2,200 as Retailer's Woes Continue: Report)

Questrom, who has watched from afar as Penney's sales and stock have suffered, told CNBC that directors needed to act quickly.

"If they think if it all of a sudden going to turn itself around, there is no way they can have reliable information – because Ron is not a source for that," he said. "The sooner they act, the better."

Penney shares are down 62 percent over the past year as Johnson's ambitious turnaround plan has struggled to take hold.

Earlier this week, the embattled chief executive was dealt another blow when the real estate company Vornado Realty Trust sold a large percentage of its stake in the company, for less than market value.

(Read More: Shareholder Trying to Dump Giant JCPenney Stake)

Vornado Chairman Steven Roth also sits on JC Penney's board.

"If I were an investor, I would say, I'm going to follow his lead," Questrom told CNBC.

Questrom even took aim at Martha Stewart, who's locked in her own saga involving JC Penney – a lawsuit challenging a contract the domestic diva previously had with Macy's. Stewart, appearing on NBC's "Today" on Wednesday morning, called Johnson a "visionary."

(Read More: 'Martha Is Going to Win': Former MSO Chairman)

"First of all, Martha Stewart is not someone I put a lot of credibility into whatever she says," Questrom said.

JC Penney's largest shareholder, Pershing Square's Bill Ackman, has publicly continued to back Johnson, though a wire report on Tuesday said that board members, including Ackman, would consider replacing Johnson if sales drops couldn't be reversed by the end of the year.

(Watch: Bill Ackman on JC Penney)

Attempts to reach the hedge fund manager were not immediately successful. A message was left for JC Penney's public relations office, which hadn't yet been returned at the time this story was published. A spokesperson for MSO declined to comment.