The die has been cast at JCPenney (JCP).

Marvin Ellison joins JCP November 1 as president moving into the CEO role in August 2015. Ellison replaces current CEO Mike Ullman who will become executive chairman.

JCP has been in CEO search mode for some time; now that the transition is underway, investors will spend the next nine months debating whether the former Home Depot (HD) executive is the right man for the job.

There are pros and cons with every new CEO; Marvin Ellison is no different. In the past month JCP stock has dropped 33% — losing all of its year-to-date gains and then some. Make no mistake, Ellison’s hiring won’t help JCP stock in the short term. The company’s recent cut to same-store sales growth forecast ensured that JCP will struggle for the near future.

The real question is the long term. Was Marvin Ellison the right hire? Can he finish the job that Mike Ullman started 18 months ago?

Marvin Ellison might not be the best man for the job, but he’s a lot better than most.

Turnarounds Aren’t Easy

Mike Ullman has done what was necessary to keep the patient from dying on the table. However, the long-term prognosis is still very much in doubt. CFO Ed Record suggested at the JCP investor day October 8 that it would grow revenue by $3.5 billion over the next three years with 2017 EBITDA ringing in at $1.2 billion, a margin of slightly more than 8%. In better days (fiscal 2007), its EBITDA margin was closer to 12%.

So, while these projections might seem implausible at the moment, they’re more than reasonable given a historical perspective. But just because JCP has achieved 12% EBITDA margins in the past doesn’t mean Ellison is going to be able to turn this trick in the future. Remember, turnarounds aren’t easy.

In May 2005, a bunch of students from the University of Kansas visited with Warren Buffett for a Q&A with the Berkshire Hathaway (BRK.B) CEO. Buffett was asked “What is your opinion of the prospects for the Kmart/Sears merger? How will Eddie Lampert do at bringing Kmart and Sears (SHLD) together?”

Two things stand out about his answer: First, Buffett felt that turning around a retailer that had been slipping for some time would be a difficult task. He was dead right. Secondly, he felt department stores would be lucky to hang on to their old customers holding out little hope for expansion. On that call he’s a bit off the mark, as both Nordstrom (JWN) and Macy’s (M) have proved that growth is possible. However, the sentiment holds for the likes of Sears and JCP and other lower-end department stores.

Marvin Ellison could be Marshall Field incarnate, and he would still face an uphill battle.

JCP and Home Depot

Some will say that retail is retail. You drive customer traffic to your doors and then sell them what they want to buy. While HD’s SKUs might be different from those at JCP, the name of the game is still the same: Sell, sell, sell.

Others, like retail consultant Walter Loeb, feel merchandising chops are extremely helpful for any CEO looking to run an apparel-driven department store. While Ellison’s 12 years in charge of Home Depot’s U.S. retail store operations and his 15 years at Target (TGT) certainly qualify him for the job, Loeb considers this a safe choice. But given what JCP went through with Ron Johnson, you could hardly blame them.

Early reaction from analysts is that Ellison’s Home Depot experience will hold him in good stead when it comes to making JCP an efficient retail operation. In addition, he has transformed Home Depot’s customer service experience over the past five years, producing a 20% increase in its sales per square foot. If nothing else, he’s likely to keep JCP from going under during his tenure.

The big question mark is whether he can make JCP relevant again. The answer determines the future trajectory of JCP stock. Ullman has certainly reversed some of the ill will Johnson created in his disastrous run as CEO. However, there’s still plenty that needs to be done to regain long-time JCP customers who have jumped ship.

JCP Bottom Line

On a scale of one to 10, I’d give Marvin Ellison’s hiring a 7.5. I certainly don’t think anyone would characterize this as a poor, hasty decision. In fact, up until Ellison was passed over for the top job at Home Depot in August, he might not have even been available. It appears Ullman and the board moved quickly once they saw an opening. JCP should be commended for that.

However, I would have preferred to see someone with real turnaround experience at the helm. Sure, Ellison transformed Home Depot’s customer service, but it’s not as if the company was ever really in danger of losing its position in home improvement.

Glenn Murphy just announced he’s stepping down as the CEO of Gap (GPS) after nearly eight years on the job. We can quibble about whether Murphy’s merchandising chops are better than Ellison’s or not but there’s no arguing the fact Murphy’s two-for-two when it comes to retail turnarounds.

Ultimately, I think Ellison can be successful in finishing the job Ullman started. Was he the right hire? I would have liked Murphy in the role (assuming he’d even want it) but now that the die is cast I’m more than fine with the decision.

JCP stock should benefit long-term from yesterday’s announcement.

As of this writing, Will Ashworth did not own a position in any of the aforementioned securities.