Jones Apparel Group's revenue decline

Jones Apparel Group, designer and marketer of brands like Nine West, Easy Spirit, Jones New York reported its revenues for the second quarter of 2009 were $804 million, as compared with $829 million for the second quarter of 2008. The decrease in revenues of 3.1% was reflective of overall economic conditions that continue to affect retail sales accross the globe. While the wholesale jeanswear division reported increased revenues of 28.5% compared with the same period in the prior year, revenues declined as expected in the other divisions.

Wesley R. Card, Jones Apparel Group President and Chief Executive Officer, stated: "We are pleased with our results for the second quarter and the effectiveness of our efforts to manage inventories, costs and expenses, which have proven to be critical in navigating through this unique economic situation. Our revenues were slightly higher than our previous guidance and our gross margin improved from last year, even as we provided additional markdown assistance to our customers. Operating margins increased in each of our wholesale businesses and we were profitable in our retail business, both of which were very gratifying in the face of this highly promotional environment."

The Jones Apparel Group continues to execute on its previously-announced retail improvement plan to right-size the retail portfolio, with the goal of enhancing segment profitability and improving return on invested capital. The Company has been working constructively with its landlords and now plans to exit approximately 240 locations throughout 2009 and 2010, and will also continue to test and evaluate new concepts, such as ShoeWoo. As of July 29, 2009, the Company remains on track with its plan and has exited 48 locations. The Company now anticipates expense savings and the elimination of unprofitable store locations to improve results by $4 million in 2009, $15 million in 2010 and $21 million in 2011. These actions will reduce future capital expenditures relating to such locations.

The Group recently signed an agreement with Kurt Geiger Ltd. to license and distribute the Nine West and Easy Spirit brands in the United Kingdom and Ireland beginning with the Spring 2010 product lines. It also increased the Company's ownership interest in international licensing partner GRI Group Limited to 25%. And the Company entered into a new $650 million senior secured three-year revolving credit facility.

Mr. Card concluded: "We are benefiting from the initiatives that we began last year to streamline our organization, optimize our distribution network and update our technology infrastructure. Furthermore, we continue to position the Company for the ultimate economic recovery and are taking the steps to strengthen and begin to increase sales of our core brands by offering well-designed products of good quality and at price-points that fit today's economy. We continue, however, to remain cautious in our outlook for the remainder of 2009."

Jones Apparel Group is a leading designer, marketer and wholesaler of branded apparel, footwear and accessories. The Company also markets directly to consumers through its chain of specialty retail and value-based stores and through its e-commerce web sites. The Company's brands include Anne Klein, Gloria Vanderbilt, Kasper, Energie, Albert Nipon and Le Suit to name but a few. Each brand is differentiated by its own styling, pricing strategy, distribution channel and target consumer.

Image: Nine West