video transcript

Told investors basic and -- highest risk. And high reward investment portfolio. Want to -- JC penny he won't somewhere around 15% accompanying picture of the largest shareholder the stocks drop north of 20% this year. You've taken a bit of -- head. They're both viewing our investment in it. Why the confidence that you think this retailer can turn around. We'll see. But. Here's what we find interest in about JC -- some great friends around 410 years. I'm by virtue of being around for a 110 years. JC -- has -- hundred and square feet of some of the best shopping mall real estate. In the country that's a great place to start. If you're a retailer it has long term -- debt maturities over very long period of time. And it's a great platform. But it was really -- day at the retailer that was going slowly. You know it really peaked probably -- -- You know late eighties early ninety's and it's been difficult from there. From the thesis was if we can bring you know Michelman was approaching retirement 66. Or so years old. Perhaps you can help recruit. The top retail CEO can bring kind of a growth strategy this company. And we -- Ron Johnson and he he's gone to work. And it's he's doing one of the most difficult. Kinds of business turnarounds and hunter Harrison at CP is an unbelievable job. Turning around -- railroad which is not an easy thing by any means but he doesn't need to change the business model the Reverend -- you know revenue side sort of takes care of itself. Hear what Iran is doing is you know fixing the cost structure taken you know something approaching a billion dollars of the cost structure. Changing the merchandise in the stores change in the way the merchandise is presented. If you had. Now the impact has been a consolidated basis something very close to the disaster right sales are down. Tremendously sequential -- have declined dramatically. No business can survive. This these these the trend here and he's working very aggressively with -- team. To fix the mistakes have been made there have been some big mistakes I think one of the big mistakes was perhaps too much change. Too quickly. Without adequate testing with -- And so you know again as -- have told our investors JC -- is the highest risk. And high reward investment portfolio you think about retail just a -- -- for second. The wealthiest people in the world. Are retailers and every country Weathers the Wilkins. And -- states or whether it's the guy who -- -- and Sweden. Wharton. In to glow. You know Japan. -- in attacks in Spain. If you get. A retailer fixed you didn't get a good model and you can replicate. It's about the best way to make money. Ever but it's not -- it's hard JC -- -- huge structural competitive advantages by virtue of its asset base by virtue of its brand. That's a good place to start but it doesn't guarantee success you commented. That the media has been very negative and CEO of Johnson gets picked on more than any other -- the only country. You really believe that criticisms not deserve criticism. Is deserved. And -- working very hard. And I -- with the data that -- is but you know look. He's this is a very difficult thing to do. He is I say the ad hominem criticisms I think it's inappropriate but look he's. The buck stops with him and CEO of the company. If it's failing under his watch -- he deserves and the -- -- Responsibility for the.