Shares for J.C. Penney (JCP) leaped to a gain of nearly 7 percent to $16.25 in late trading on Thursday as legendary billionaire investor George Soros’s Soros Fund Management revealed a 7.9 percent stake in the beleaguered department store.
The news comes as a welcome relief for the company, who earlier in the month replaced CEO Ron Johnson with his predecessor Myron Ullman in a last-ditch move geared towards stemming the massive losses incurred under Johnson’s leadership.
Johnson, a former Apple Inc. (AAPL) executive who is widely credited as the architect of the Apple Store, was brought on as JC Penney’s CEO in November of 2011. Shortly after his arrival, he completely revamped the company’s longstanding and wildly popular sales format, leading to unprecedented and staggering losses.
The replacement of Penney’s age-old coupon deals and sales with “everyday low prices” led in total to a 25 percent decline in sales and a $985 million loss in profits.
The news comes not long after another high-profile investor and hedge fund manager, Bill Ackman, who has a 17.8 percent stake in the company and was one of the original advocates for Johnson’s hiring, reaffirmed his position and indicated that he had no plans to leave JC Penney any time soon.
The disclosure of Soros’s stake in the company, a total of 17,386,361 shares, comes on the same day as the company seems to be doing further house-cleaning at the executive level.
Company spokesman Joey Thomas said in an email on Thursday that the vice president of the company’s construction division, Michael Koch, as well as Robert Laughrea and Todd York who are directors from that same unit, have parted ways with the company, along with Ben Fay, executive vice president of real estate, store design, and development. Koch, Laughrea, and Fay were all hired during Johnson’s tenure.
The news could indicate that things are looking up for the company after a seemingly unfathomable first quarter, during which it had to contend with a nasty lawsuit from Macy’s, itself a legacy of the brief but disastrous Johnson tenure. Ullman has looked to $850 million in the store’s revolving credit line, and on Monday JC Penney’s stock was upgraded from neutral to buy by Gilford Securities.