Classifieds | Archives | Jobs | About TGT | Contact | Subscribe
 | 
Last updated 15 minutes ago
Printer Friendly Version | TGT@Twitter | RSS Feed |
HOME LOCAL MIDEAST ASIA WORLD BUSINESS SPORT OPINION WRITERS
Mistakes made in JCPenney turnaround: William Ackman
April 08, 2013
 Print    Send to Friend

BOSTON: Hedge fund manager William Ackman said that Ron Johnson, the chief executive officer he handpicked to turn around JC Penney, has made “big mistakes” and the impact on the struggling retailer has been “very close to a disaster.”

The “criticism is deserved,” Ackman said of Johnson, a former Apple executive who has come under fire for his blunders to overhaul the staid retailer with cost cuts, more fashionable merchandise and a new pricing strategy.

 “One of the big mistakes was perhaps too much change too quickly without adequate testing on what the impact would be,” Ackman said at an investment conference sponsored by Thomson Reuters.

 After months of being a public cheerleader for Johnson, often saying that he was a doing a great job, the fund manager  tempered his normally upbeat comments on Friday.

Speaking bluntly, Ackman, who sits on the JC Penney board and whose $12 billion Pershing Square Capital Management is the company’s largest shareholder, said big mistakes have been made remaking the 110 year-old retail brand.

JC Penney traditionally drew in customers with big sales and coupons but Johnson has been criticized for eliminating those in favor of every day low prices.

The company has now brought back their old pricing strategy to try to bring shoppers back.

Ackman said that Johnson faces one of the toughest challenges in corporate America in cutting costs and changing the merchandise and that “the impact has been, on a consolidated basis, very close to a disaster.”

Right now Johnson is “working very aggressively with his team to fix the mistakes that have been made, and there have been some big mistakes,” Ackman said.

JC Penney did not immediately respond to a request for comment.

Ackman, a favorite with pension funds and wealthy investors, has come under criticism for bets on retailers in the past, including bets on Target and bookseller Borders a few years ago. Currently Pershing Square is sitting on roughly $500 million in paper losses in JC Penney.

“If you get a retailer fixed and you can replicate it, it’s about the best way to make money,” he said.

While JC Penney’s losses are making headlines, Ackman’s portfolio gained 6.1 per cent during the first quarter thanks to bets on Canadian Pacific Railway and Procter & Gamble.

Reuters

Add this page to your favorite Social Bookmarking websites
Comments
 
Post a comment
 
Name:
Country:
City:
Email:
Comment:
 
    
    
 
FRONTPAGE
 
GALLERY
 
PANORAMA
 
TIME OUT
 
SPORT
 
 
Advertise | Copyright