NEW YORK — Wesley Card, chief executive officer of The Jones Group Inc., is pleased with the progress the company is making, after experiencing mixed economic trends and low consumer confidence last year.
Speaking at the company’s annual shareholders’ meeting Thursday at its law firm, Cravath Swaine & Moore, Card discussed the company’s overall performance in 2011, and spoke about the challenges and opportunities that lie ahead.
In 2011, Jones’ sales increased 4 percent to $3.8 billion, while net income was off 5.8 percent to $50.7 million. The company delivered $272 million in operating cash flow and ended the year with $240 million on its balance sheet, thus beginning 2012 “in a strong financial position,” said Card. “Over the past few years, we have been undergoing a substantial transformation to enhance our operating performance. Although we have been doing this in difficult economic times, we have been steadfast in making very significant changes in our organization and operating philosophy,” he said.
Card has identified five strategic pillars to achieve their goals. They consist of revitalizing core brands, investing in emerging brands, expanding its international footprint, improving direct-to-consumer performance and building operational excellence.
Specifically, he said, the company’s core brands of Nine West, Jones New York, Anne Klein, Gloria Vanderbilt, L.E.I. and Easy Spirit generated about two-thirds of its revenues in 2011. He said the company’s emerging brands — Stuart Weitzman, Kurt Geiger, Robert Rodriguez, Rachel Roy, Jessica Simpson and B. Brian Atwood — contributed 14 percent to net revenue in 2011, compared with less than 1 percent in 2008. Since 2008, international sales have increased from 9 percent of total sales to an estimated 21 percent projected for 2012.
“Our biggest profit opportunity is turning around our own chain of stores — and we have been aggressively closing underperforming locations,” said Card. He noted that the firm has been enhancing product assortments and improving the overall in-store customer experience. In addition, Jones is improving its online presence, connecting with customers via social media vehicles as well as its e-commerce sites.
One shareholder asked Card if the company has resolved its issues with People for the Ethical Treatment of Animals, and Card replied, “We no longer use fur in any of our products.”
Following the meeting, Card and Richard Dickson, president and ceo of branded businesses at Jones, briefly discussed the status of some of the Jones brands. Dickson told WWD he was excited about Anne Klein’s new look. He said Anne Klein sportswear is making a comeback, and the footwear and jewelry continue to do well. Card said its denim division “is no longer for sale,” after a deal to sell it to Delta Galil Industries fell through in January. He said the L.E.I. business has been solidified with Wal-Mart Stores Inc. For its department store distribution, it is producing a denim line under the Jones New York label, which is the core of the business. Card said the company is working on several initiatives with J.C. Penney Co. Inc., but was unable to discuss them at this time.