Ackman takes $500 million loss on J.C. Penney as saga ends

  • Article by: Matt Townsend , Bloomberg News
  • Updated: August 28, 2013 - 1:37 PM

 

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swmnguyAug. 27, 13 7:54 PM

If you own stock, and you notice Bill Ackman's Pershing Square fund has bought a bunch of that same stock, get out. Ackman won't necessarily lose money; he's a billionaire for a reason; but his presence will be bad for the company he takes a big position in.

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dsteinbe1977Aug. 27, 13 9:27 PM

I lost my job 3 months after I started thanks to Pershing Square taking over a Twin Cities Regional company. Hope he has enough to live off of.

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jbpaperAug. 27, 13 9:31 PM

First Target and now JCPenny, I'm thinking it might be time for him to just go away.

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supervon2Aug. 27, 13 9:39 PM

Quite frankly, when they used Ellen as spokesperson I felt that was a real step down. Not because of sexuality but because she is just plain not funny. Her lines are faded more than old blue jeans after 1,000 washes. The second mistake was hiring Apple's former VP who turned out not to know any more about marketing than a high school flunky. Game over. They need to learn how to compete with Gordmans, Marshalls and other others in their class.

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gofurnuttAug. 27, 1311:57 PM

In the case of J.C. Penney, After you've burned a 100+ year old company to the ground with your Illiterate and Uninformed Interference, It probably is time to get out.....

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kbehmAug. 28, 13 6:33 AM

Glad Target was able to get him to leave before he burned that company to the ground too.

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ollie3Aug. 28, 13 7:25 AM

A prime example of why the holding period for benefitting from the long term capital gains rate should be extended beyond one piddly year. Clowns like Ackman and Icahn just want to come in and do a quick reorg, selloff of assets or stock buyback, with no real concern for the long term viability of the company they're "investing" in

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casmithmnAug. 28, 1310:13 AM

Don't hate me for saying this. But, truthfully, JC Penney stores have never looked better. The new branding and merchanding strategy clearly wasn't a hit with the core customers, but it seems like someone is due a little credit for the pretty awesome facelift. I think it greatly improves the shopping experience.

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careydAug. 28, 13 2:32 PM

I gotta come right out with what I think will be a pretty contrarian view here. JCPenny's business was dying. Why? Because it's core demographic is simply aging out, and not being replaced with newer, larger spending, younger demographic. JCPenny had conditioned their aging core demographic to "wait for the sale" and never shop without a 70 percent off coupon. All of this pandering to the core shopper may have kept enough sales going to slow the decline...but make no mistake about it...a decline and death was coming without major change. In my opinion JCPenny needed (and still needs) a radical transformation to carve out a new space and target a new demographic. I believe Ron Johnson's work at the company, while--YES, OF COURSE--initially alienating the core demographic represented a fresh new direction, but simply WASN'T GIVEN ENOUGH TIME TO WORK. A huge transformation was/is needed, but you don't just implement and see the results from that kind of change without suffering a few bad quarters...years in fact...yet it's the way out. Adapt or die...you know it's cliche but it's true. Firing Ron Johnson with the transformation plan less than half implemented and trying to revert your business back to your "tried and true...but "known" to be failing business model is what they have tried to do. Now everybody is pissed. Now they have even bigger problems. What a mess. Should have stayed the course with Johnson. Really. I mean that.

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swmnguyAug. 28, 13 2:52 PM

"careyd": I happen to agree with you about JCPenney. My issue with Ackman has mostly to do with his campaign to get Target to beef up their cash position by selling off their actual assets; their real estate and credit operations. If they had done what he wanted them to do, it would have filled their coffers with cash, artificially and temporarily jacking up the book value of the company and most likely, inflating the value of Ackman's shares. Which he would have immediately dumped at an enormous short-term profit. And then Target would have been, in the long term, grievously weakened. Target did the right thing in telling him, and then forcing him, to hit the bricks.

I don't know nearly as much about the JCP drama. But I agree with you that what Johnson tried to do was a better strategy than what they were doing before, and probably better than what they're going to do now. Who knows. It might have been Ackman's presence that started the backlash.

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