Tags: Penney | shares | Vornado | stake

Penney Shares Fall as Vornado Unloads Half Its Stake

Monday, 04 Mar 2013 09:37 PM

Shares of J.C. Penney Co. slid in late trading Monday after Vornado Realty Trust, its second biggest shareholder, sold almost half its stake in the struggling department-store company, according to two people familiar with the offering.

Vornado sold a 10-million share block of J.C. Penney stock at $16.40 each through Deutsche Bank AG, said the people, who declined to be identified citing lack of authorization to speak publicly. J.C. Penney fell 2 percent to $16.40 at 7:59 p.m. in New York. The Plano, Texas-based retailer’s stock had declined 5.4 percent at the close, taking its drop so far this year to 15 percent. The shares declined 44 percent last year.

The department-store company, led by former Apple Inc. retail chief Ron Johnson, last week reported a 25 percent decline in annual revenue to $13 billion, the lowest since at least 1987. Johnson, who joined as CEO in November 2011, has lost customers with a shift to everyday low prices, which he has since retrenched on, as he tries to transform most of the company’s stores into a collection of 100 boutiques.

Vornado, the owner of more than 100 million square feet of U.S. properties, last week reported a $224.9 million loss on its 10.7 percent stake in J.C. Penney. Vornado, with 23.4 million shares, was the second-biggest investor in the retailer after hedge fund manager Bill Ackman’s Pershing Square Capital Management LP, which has 17.8 percent of shares. The company’s chairman, Steven Roth, is a member of J.C. Penney’s board of directors.

Roth Call

“I’m a director of J.C. Penney so I can’t talk very much about it, but J.C. Penney is an investment that is in progress now, and it would be inappropriate for me to talk about what our holding period might be, or our plans in terms of sale or not- sale,” Roth said on a conference call on Feb. 27.

Joey Thomas, a spokesman for J.C. Penney, said in an e-mail that the company doesn’t comment on market activity.

J.C. Penney’s shares have declined 44 percent since June 13, 2011, the day before Johnson was announced as J.C. Penney’s next CEO. The Standard & Poor’s 500 Retailing Index has gained 45 percent in that time.

CNBC reported the Vornado news earlier Monday.

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