Jones Apparel profits plummet

US fashion group Jones Apparel has reported a 70 percent drop in first quarter profits due to the sale of the Polo Jeans business. Earlier this month it sold the license back to Polo Ralph Lauren. The group said it planned to use the proceeds of the sale to explore new strategies, including acquisitions. Excluding the effect of the sale, earnings exceeded expectations.

Jones put itself up for sale last month. The group, which owns brands like Jones New York and Anne Klein and operates Nine West and Barneys New York, is being courted by private equity groups Texas Pacific Group, Bain Capital and Cerberus Capital Management, reports WWD. The group's net income dropped from $87 million (£48.7 million) a year ago to $25.8 million. Although with adjusted earnings - after cutting out the loss from the Polo sale, severance costs and new accounting methods - Jones Apparel beat expectations.

Net sales for the quarter dropped to $1.2 billion from $1.34 billion the year before, although same store sales rose 0.9 percent at Jones' footwear and ready-to-wear businesses and 6.6 percent at luxury department store Barneys.