“It’s a difficult transition,” he said. “There are some extreme couponing customers, who we probably lost money on, who may not come back, but the people who are focused on quality and value, and ultimately product, we should do very well.”
This leads Ackman to suspect that the sharp same-store sales decline of 18.9 percent in the first quarter should be the bottom for JCPenney.
Ackman said he has “a lot of patience” to wait for the company's strategy to yield results.
“Time is your friend because eventually people will get it,” he said.
During the first quarter, JCPenney focused on brand marketing but not on price and value, he said. He expects that message will come.
The department store also hasn’t announced the names of the new brands that will be sold within the store. That announcement won’t come until August, Ackman said. There also will be new technology coming to change the customer experience, he said.
Despite Ackman's confidence, he has stumbled with an investment in the retail sector in the past. In 2009, Ackman had started a fund to bet solely on Target. He took a stake, and launched a proxy fight, where he looked to replace four members of Target's board. In the end, the effort didn't work, and Ackman lost much of the value of that investment and even reached into his own pocket to pay back a portion of the money investors had given him.
Questions? Comments? Email us at firstname.lastname@example.org. Follow Christina Cheddar Berk on Twitter @ccheddarberk.