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Jones Group to Close 170 Shops, Cutting Workforce by 8 Percent

Jones New York Spring 2013 campaign | Source: Jones New York
By
  • Bloomberg

NEW YORK, United States — Jones Group Inc., the owner of the Jones New York, Nine West and Anne Klein fashion brands, will close 170 stores and cut 8 percent of its workforce after first- quarter profit trailed analysts' estimates.

The actions will generate about $40 million in annual pretax savings by mid-2014, New York-based Jones Group said today in a statement. The plan will result in costs of $40 million to $60 million in the next 15 months, the company said.

Chief Executive Officer Wesley Card has been trying to turn around Jones Group by focusing on higher-priced women's apparel brands like Rachel Roy and Stuart Weitzman shoes while at the same time trying to revive the Jones New York and Anne Klein department-store sportswear brands. The company is unveiling a new Jones New York sportswear line in the fall.

Jones Group also reported preliminary first-quarter adjusted profit of 15 cents a share on sales of about $1 billion. Analysts estimated profit of 25 cents on revenue of $997.3 million. The company will issue its quarterly report on May 1.

Jones Group forecast revenue of as much as $3.95 billion this year. Analysts projected $3.97 billion.

About 850 jobs are being cut, said Sharon Stern, a Jones Group spokeswoman who works for Joele Frank, Wilkinson Brimmer Katcher. Jones Group operated 594 stores as of Dec. 31.

Jones Group fell 4.4 percent to $13 at 8:12 a.m. in New York. The shares advanced 23 percent this year through yesterday, compared with a 9.4 percent increase for the Russell 2000 Index.

By: Cotten Timberlake; with assistance from James Callan in New York. Editors: Kevin Orland, Niamh Ring

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