Remember JC Penney? For baby boomers, this store was kind of like the inconspicuous, cheaper but still somewhat classy version of Macy’s. But over the past couple of years the store’s reputation— along with its revenue— has dwindled.
So they did what any department store on the verge of a major meltdown would do: they hired Ron Johnson, the genius behind Apple’s retail stores, in efforts to revamp the company. And Johnson… well he tried. He added brands like the Kardashian Kollection, modernized stores, redesigned the logo and even hired everyone’s favorite day time chatterbox Ellen DeGeneres as a spokeswoman (second only to Wendy Williams, respectfully).
But alas, the new hire went nowhere fast. Johnson’s 17-month stint as JC Penney’s new CEO proved to be a catastrophe — and his firing was followed with embarrassing headlines such as: “Former Apple Retail Guru Dumped;” “How Ron Johnson Made JC Penney Even Worse;” and the ever-tactical: “I Am Become Ron Johnson, Destroyer of Worlds.”
Under Johnson’s leadership, JC Penney’s share price plunged by half and the company lost $4 billion in sales.
But this week, good news came pouring in for cult fans of the socially confused department store: hedge fund billionaire George Soros announced that he bought a hefty 7.9 percent stake in JC with 17.4 million shares, according to a securities filing.
Interesting to note is the stake is passive, meaning that Mr. Soros will not try to exert influence on the embattled retailer. And following Soro’s stock market shopping spree, Penney’s shares rose a whole 7 percent in after-hours trading. Despite taking a beating this year, the stock ended regular trading up 5 cents at $15.24, before the stake was disclosed.
The 82-year-old Soros is the second hedge fund manager to take an interest in JC Penny— the first being William Ackman, the head of Pershing Square Capital Management, who also holds a plump stake. Ackman’s firm currently owns a 17.8 percent stake in Penney, and he continues to express confidence in the company despite its recent troubling times.
“I don’t see a scenario in which we don’t work this thing out,” Mr. Ackman said earlier this month.
Still, it’s not very clear what inspired Soros’s interest in the department store as the Wall Street legend had stopped managing outside money several years ago. Perhaps whisperings from a friend he happens to share office space with, otherwise known as Bill Ackerman. Regardless, it’s good news for Penny all around, as his recent interest in the retailer will most likely cause some more investors to give Penney a second look.