Investors Show Faith in JC Penney, Barnes & Noble’s Future
Elaine Misonzhnik / Retail Traffic
…Both retailers have taken significant steps to improve their standing. Barnes & Noble’s Nook e-reader has been among the most popular e-readers available. In July, Consumer Reports declared the Nook Simple Touch Reader the best e-reader on the market, marking the first time the Nook beat out Amazon’s Kindle. That should make it much easier for Barnes & Noble to deal with changes in the bookselling industry. One of the reasons Borders has been forced out of the market has been its slow move to adapt the online and mobile sales channels.
JC Penney, meanwhile, made a major bet on Apple’s head of retail Ron Johnson. Johnson, who helped make the Apple stores among the most profitable in the retail universe, will join JC Penney this November as CEO. This appointment, coupled with the chain’s popularity with middle-income consumers, makes it an attractive long-term bet, according to Jeff Green, president of Jeff Green Partners, a Phoenix, Ariz.-based retail real estate consulting firm.
Real estate play?
JC Penney’s real estate holdings also remain quite attractive and may offer Pershing Square an additional incentive to invest, according to Davidowitz. Ackman is well-known for his interest in retail real estate, from his stake in General Growth Properties to his past efforts to spin Target stores into a REIT. As of January, JC Penney operated 1,106 department stores in 49 states and Puerto Rico, primarily at regional malls. The chain owned 426 of the stores directly.
“The department store boxes in malls have proven to be fairly valuable, which was not expected,” notes Green. “But then [we saw] Target and Costco taking over some of these boxes.”…
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