Buffett Has No Financial Interest in J.C. Penney

BECKY: —way to go. Hey, very quickly, before we go to a break Warren, I wanted to ask you about J.C. Penney. We’ve been watching this story very closely. There was a story recently about how I think Goldman Sachs had been potentially lining up— a line of credit for them. It’s got to be a company that you’ve been following too, because Fruit of the Loom is a supplier.

BUFFETT: Well, they’re a supplier, I worked for J.C. Penney for a considerable period. I’ve got a rooting interest for them, I don’t have a financial interest. But I would like to see .J.C Penney succeed.

BECKY: You would like to see them succeed. Do you think they’re going to?

BUFFETT: I think it’s very tough. I mean, they obviously alienated a significant part of their customer base in the last 18 months or whatever it’s been. And retailing is tough game. And you’ve got very, very smart competitors who are out there doing smart things every day.

So when you lose momentum and when you turn off a significant percentage of your customers, it is a big job to get back. I really hope that (new CEO Myron) Ullman pulls it off. I mean, I’m for him and I think that they’ve got a good man in there to do it. But but I’ll just have to wait and see the figures.

BECKY: They’ve been burning through cash pretty quickly.

BUFFETT: Sure.

BECKY: Has it ever gotten to the point where as a supplier you’ve gotten nervous about it?

BUFFETT: No. But you worry about that if you’re a retailer getting to that point. When your suppliers get worried, you’ve got troubles. But that is not the case with Penney.

BECKY: So you’ve never actually worried about it?

BUFFETT: No, no.

Source: Warren Buffett and Bill Gates on Squawk Box, 8 May 2013

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