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Wednesday, 7 December 2016
Last updated 5 hours ago
Apr 12 2013 | 10:40am ET
As things go from bad to worse at J.C. Penney, Pershing Square Capital Management is sticking with the troubled retailer.
The hedge fund's founder, William Ackman, denied rumors that he was preparing to dump his 18% stake in Penney's, in which Pershing Square is the largest shareholder. And with Penney's hiring the Blackstone Group to help it raise $1 billion in capital, Ackman said he and other shareholders are willing to contribute.
"We're prepared to put in more capital," Ackman told a business luncheon in New York. "I've spoken to the other big holders, a number of them, and if the money's needed, the shareholders will put it up."
Penney's this week parted ways with CEO Ron Johnson, the former Apple Inc. retail chief whose hiring was engineered by Ackman. Considered a coup for Penney's at the time, it proved a disaster, with Johnson's initiatives, including the ending of discount sales, driving Penney's customers away.
Ackman said that Johnson lacked "the execution, the basic blocking and tackling of running a retailer," although he blamed former chief operating officer Mike Kramer for that. He did say that Johnson's decision to remain in California, rather than at Penney's Texas headquarters, was a problem.
"The home team lost confidence."