George Soros apparently sees opportunity at the ailing J.C. Penney Co. Inc.

This story first appeared in the April 26, 2013 issue of WWD. Subscribe Today.

Soros Fund Management bought 17.4 million shares of Penney’s, giving the prominent liberal philanthropist and investor a 7.9 percent stake, according to a filing with the Securities and Exchange Commission.

Soros, who famously rocked the Bank of England by shorting the pound in 1992, was greeted heartily by other Penney’s investors. Shares of the company shot up 7.2 percent to $16.33 in after-hours trading. At that price, Soros’ stake is worth $283.9 million.

“[The investment] shows his confidence in the company,” said Walter Loeb, retail consultant. “It also shows that he thinks the return to a more promotional attitude will generate enough sales to return the company to profitability.”

Penney’s lost nearly $1 billion last year and 25 percent of its sales as former chief executive officer Ron Johnson tried to eliminate coupons and remake the store into a series of shops-in-shop.

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Price promotions are now making a return and veteran Myron “Mike” Ullman 3rd is again at the helm as ceo, working to calm vendors and deciding how to proceed with the shop-in-shop strategy. The company is said to have burnt through $1 billion in the first quarter and has engaged a number of consultants to help it raise funds beyond the $850 million recently drawn from its credit facility.

Penney’s stock fell by 50 percent during Johnson’s tenure and is having to regroup just as retail shares roar to new highs — a dichotomy that sets up the company as a potentially attractive investment, if it can reconnect with consumers.

On Thursday, the S&P 500 Retailing Industry Group gained 1.4 percent, or 10.20 points, to 755.55, setting a new record of 758.73 in midday trading. Retail was bullish versus the broader market. The Dow Jones Industrial Average ended up 0.2 percent, or 24.50 points, to 14,700.80. Low interest rates have helped push the stock market to new heights even as the recovery has remained shaky.

Soros is Penney’s fifth-largest institutional investor. Activist investor William Ackman’s Pershing Square Capital is the company’s largest investor, with a 17.8 percent stake. Ackman, who agitated for change at the retailer and helped bring in Johnson, has said he’s sticking by his investment. Rounding out the top five Penney’s investors are ID Management, Dodge & Cox and State Street Corp.

Soros Fund Management has investments in 212 companies, with a total market value of $5.67 billion. That includes 1.3 million shares of Wal-Mart Stores Inc., worth $98.3 million, and 1.1 million shares of Macy’s Inc., valued at $48.4 million.

Soros has dabbled elsewhere in fashion, for instance, repeatedly pumping money into e-commerce company Bluefly Inc. And last year, his Crystal Financial fund extended American Apparel Inc. $80 million in financing, allowing the racy U.S. producer to retire other debt.

The investor’s reach is long on Wall Street and several retail analysts declined to comment on the investment, citing Soros as a client. A spokesman for Soros also declined to comment, as did a spokeswoman for Penney’s.