Czech billionaire bets big on Macy’s, Foot Locker

Bloomberg

Across the US, sales are cratering, bankruptcies are on the rise, and unemployment has hit unprecedented levels. With consumers glued to the couch watching Netflix or commiserating over Zoom, retailers have been especially hard hit. Yet even as the coronavirus pandemic wreaks havoc on American malls and main streets, a billionaire from Prague sees something in the wreckage: bargains.
Vesa Equity Investment, a private equity firm controlled by Daniel Kretinsky, a 44-year-old investor little known
outside of finance circles, disclosed it had acquired a 5% stake in Macy’s Inc, the troubled department store chain that has seen its stock nose-dive by more than half this year. Then on May 18, Vesa said it had bought 6% of sneaker-seller Foot Locker Inc, whose shares are off by a quarter.
In a filing with the Securities and Exchange Commission, Vesa said it planned to “engage in constructive discussions” with Macy’s. While analysts pondered what that might entail, some had a more fundamental question: Who is this guy?
“I had to look him up,” says David Swartz, an analyst with Morningstar Inc who covers retailers. “I’d never heard of him.”
Over the last few years, Kretinsky has emerged as a contrarian financier with a taste for industries others avoid, assembling an eclectic portfolio ranging from power plants and supermarkets to media companies and even the UK’s privatised Royal Mail Plc. The strategy has paid off: In the last three weeks, Kretinsky’s net worth has climbed by $100 million, according to the Bloomberg Billionaires Index.
Kretinsky can come across as a cold-eyed capitalist unafraid to challenge boards of companies in his portfolio and invest in unfashionable assets such as coal. Yet he also casts himself as a steward of liberal values and independent debate as owner of Czech newspapers and French media properties, including a minority stake in Le Monde, the prestigious Paris daily.
He rarely speaks publicly and grants few interviews to explain his approach, prompting a Polish magazine to dub him the “Czech Sphinx.” Kretinsky, who tested positive for coronavirus in March and worked from home as he recovered from what he said felt like a light cold, declined to comment for this article.
While his eye for value has helped Kretinsky build a $1.8 billion fortune, he’s also suffered setbacks. The journalists at Le Monde have bristled at the ownership of a tycoon who made his money in fossil fuels. And in 2019, the board of the German retailer Metro AG rejected his $6.5 billion takeover bid.