Hedge Fund Chief Dumps JCPenney for $490M Loss

Ackman backed policies that led to huge drop in sales

By Rob Quinn,  Newser Staff

Posted Aug 27, 2013 1:35 AM CDT

(Newser) – After buying a huge stake in JCPenney and backing a disastrous revamp that has left the chain floundering, Bill Ackman has decided he's done with the company. The Pershing Square hedge fund Ackman runs has announced its intention to unload its 18% stake in the company at a price that's about half what it paid a few years ago, a move that will cost the fund around $490 million, USA Today reports. Ackman quit the JCPenney board earlier this month after a conflict with other directors.

Ackman—whose fund was the retailer's biggest shareholder—has made bad bets in the retail industry before, with investments in Target and Borders both souring, the Wall Street Journal notes. "Clearly, retail has not been our strong suit, and this is duly noted," he admitted in a letter to Pershing Square investors last week. Unlike thousands of people who worked at JCPenney before the policies he championed sent sales plunging, however, Ackman still has a job.

Sales at JCPenny plunged after Ron Johnson, Ackman's chosen CEO, brought in new policies including an end to sales.   (AP Photo/Mark Lennihan, File)
FILE - In this Tuesday, April 9, 2013, file photo, Customers shop at a J.C. Penney store, in New York. Activist investor Bill Ackman said Friday, Aug. 9, 2013, he has lost confidence in J.C. Penney's...   (AP Photo/Mark Lennihan, file)
"Clearly, retail has not been our strong suit," Ackman mused.   (AP Photo/The Canadian Press, Pawel Dwulit)
« Prev« Prev | Next »Next » Slideshow
To report an error on this story, notify our editors.

Other Sites We Like:   The Street   |   MSN Living   |   PopSugar Tech   |   RealClear   |   24/7 Wall St.   |   Biography   |   Barstool Sports   |   OK!