J.C. Penney Co Chief Executive Ron Johnson has said his plan to reinvent the 102-year old retailer will take years to carry out. But after Penney's latest sales debacle, he may have only six more months to get the job done.

The once-vaunted CEO, the man who built up Apple Inc's retail chain, conceded on Wednesday he made major mistakes in the first year of the turnaround, above all getting rid of the sales and coupons that Penney shoppers want.

In the first year of his plan, Penney's sales fell almost 25 percent and the company posted huge losses, including Wednesday's announcement of a dismal holiday season.

Penney shares ended down 17 percent at $17.57 on Thursday on fears Johnson won't be able to stanch the bleeding anytime soon.

Analysts predicted he will have until after the "back-to-school" season in August, the second most important time of year for Penney, to prove his ideas. Otherwise the board, investors and even vendors could press for change before Christmas.

"That's when the rubber hits the road," said Dan Hess, chief executive of Merchant Forecast, which provides retail financial research. "It'd be the last chance to make a change that would have a meaningful impact on the holiday period."

It would also give stakeholders a chance to see whether the return of regular sales events and coupons brings back shoppers, and whether the new home goods boutiques Penney is rolling this spring are finding favor.

Johnson's plan has been to turn Penney's stores into collections of dozens of trendy, branded boutiques; Levi's, Izod and Liz Claiborne have been among the first batch and shown strong initial results. Next month, Canada's hip, colorful Joe Fresh fashion brand will open its boutiques as well.

ACKMAN STILL BEHIND HIM

William Ackman, whose Pershing Square Capital Management hedge fund is Penney's top shareholder, has repeatedly offered support for Johnson and said the turnaround will take years.

Ackman, who sits on the Penney board, kept a low profile on Thursday. He did not immediately return emails and calls for comment on Penney's 31.7 percent same-store sales decline last quarter, even though he usually responds to questions about Penney.

Two weeks ago, at an investment conference, Ackman suggested he too may have limited patience.

Overhauling stores, improving up selection of goods for the home and adding Joe Fresh will change the outlook for the company, calling them a "tipping point," he said.

"If it doesn't work, the company will stop, take a breath and figure out what to do next," Ackman said.

On a conference call Wednesday to discuss Vornado Realty Trust's quarterly results, Chairman Steven Roth - who also sits on Penney's board - said it was inappropriate for him to talk about Vornado's plans regarding its Penney shares.

Vornado and Pershing control nearly 40 percent of Penney shares together, giving Johnson some protection so long as they continue to support him.

Both investors are losing money on Penney on paper. The retailer is the fifth-largest holding for Pershing Square Capital Management. The $12 billion fund owns 39 million shares, which it started buying in August 2010 at around $20 a share, spending as much as $29 per share in October 2010. Vornado owns 18.6 million shares and started buying its stake at roughly the same time as Pershing Square.

EVEN MORE DISCOUNTS, COUPONS

Penney began bringing back sales events and giving out coupons in January, and on Wednesday Johnson said the retailer would be holding sales every week now, essentially reversing himself on his previous adamant stand against sales and coupons.

The company held a sale on Valentine's Day that lifted jewelry sales 36 percent, he said.

Merchant Forecast's Hess said his firm's research showed much more muted declines in January than in December. He also said February has shown the most improvement since the turnaround plan.

But at the same time, Penney has angered many long-time shoppers - more typically a mother on a budget than a fashionista - and analysts called for a more aggressive diet of sales events, discounts and coupons to bring them back in.

"He should do what Macy's is doing: banging away once, twice a week with sales events," said retail industry veteran Walter Loeb, who has been a senior merchant at Macy's and an analyst at Morgan Stanley.

Loeb, who also predicted Johnson has six months to show he's on the right track, questioned whether Penney was going too far down the road of trendy lines. Its new fashion boutiques include Nanette Lepore and a line by Marchesa.

"A lot of the products are irrelevant to the typical Penney customer," Loeb said.

Loeb and Hess, among others, predicted Penney, with or without Johnson, would settle on a hybrid model, keeping the store-in-stores but also an abundant array of discounted items that Penney shoppers have long come to expect.

Either way, the clock is ticking for Johnson.

"After reporting another beyond-worst case scenario quarterly result, our concern that (J.C. Penney) will not be able to stabilize the business has increased yet again," Credit Suisse analyst Michael Exstein wrote in a note to clients.