Corporate News: Penney Gets Shot In the Arm From Soros
J.C Penney Co. has been in a state of turmoil due to a very deep decline in sales. The blame for J.C. Penney’s sales decline has been placed on the former Chief Executive, Ron Johnson. His revolutionary plan to cut sales in favor of everyday low prices has backfired and alienated many of their “bargain” shoppers. This untested strategy which failed essentially led J.C. Penney to replace Ron Johnson with his predecessor, Myron “Mike” Ullman. Another hurdle Penney is trying to pass is the legality of selling Martha Stewart brand goods, exclusively at their home department.
Despite their unstable position, Financier George Soros purchased roughly a 8% stake in J.C. Penney Co. which expresses confidence in a better future. Soros Fund Management LLC acquired around 17.4 million Penney shares and this helped raise some funds for Penney’s deteriorating cash flow.
This is not only extremely important, but also relevant to all of our lives. Most of us have been to or seen J.C Penney. The failure of this major department store could have catastrophic effects on our economy.