Retail is dying, but hedge fund giant Steve Cohen is placing a large bet in the sector.
On Friday, Cohen's Point72 Asset Management LP reported a 5.3% passive stake in Conn's Inc. (CONN) as of Thursday, June 22. The Texas-based retailer sells electronics, furniture and appliances. Point72 is now the fourth-largest institutional shareholder in Conn's, after Anchorage Capital Group LLC, PAR Capital Management Inc. and Stephens Inc.
Cohen founded Point72 after his former firm, SAC Capital, pleaded guilty to insider trading (Cohen himself was not charged with wrongdoing). When SAC wound down, Cohen reorganized the firm into a new family office, Point72. He's barred from managing outside money until next year.
Averting a potential activist campaign from hedge funds Luxor Capital Group LP and David Einhorn's Greenlight Capital Inc., Conn's in 2014 hired Bank of America Merrill Lynch and Vinson & Elkins LLP to explore strategic alternatives, including a possible sale or spinoff of its consumer credit business. About a year later, Conn's instead hired a new CEO and announced a $75 million share buyback program and $1.4 billion securitization program.
Results have continued to be dismal. For its first quarter of the 2018 fiscal year, ending April 30, Conn's reported a 15.2% same-store sales decline and a net loss of $9.75 million.
Conn's shares closed Friday at $17.10, up 0.88%. The stock price has more than doubled in the past year.