By  on April 5, 2007

NEW YORK — Speculation swirled around the future of Jones Apparel Group after the disclosure that president and chief executive officer Peter Boneparth's contract will not be extended beyond March 31, 2009.

Some analysts said changes, including a possible breakup of the company, might be on the horizon. Any proceeds could be redirected to grow an existing business or for acquisitions. However, other industry experts didn't read anything into the disclosure

"Ultimately, it indicates some change of direction for the company, probably a split-up...or a sale of its parts,'' said Walter Loeb, a former Wall Street retail analyst and a consultant with the firm that bears his name. "There are some parts of the company that are doing well, and a sale of the parts is worth more than the whole company. Or one can see former director Allen Questrom coming back down the road to lead the firm."

According to a regulatory filing March 27 with the Securities and Exchange Commission, Bone­parth and the company each delivered a "non-extension notice'' to the other on Boneparth's employment agreement.

Company executives have declined to comment.

"I think the sale of an asset is a possibility if the offer is right,'' said Jennifer Black, an independent research analyst at Jennifer Black & Associates. "Shareholders have been patient, and haven't really seen a return on their investment. The businesses are doing better, and there is a chance that by August you may see the stock price of Jones doing much better because the company is doing better. That said, I also think that there's a possibility that after this contract is over, he'll have been with the company eight years, and it makes sense that Peter Boneparth might want to do something else."

Jones Apparel Group stock increased 0.91 percent on Wednesday, to close at $32.24 in New York Stock Exchange trading. More than 1.6 million shares were traded, compared with a three-month average of 1 million shares.

Emanuel Weintraub, an industry consultant with his own firm, doesn't believe that changes are coming any time soon. "There is a mutual respect here. Peter is content to stay there, and we know the company is big enough that it has some really deep pockets. If they didn't really want to get along, Peter's contract would have been bought out. The board is satisfied with Peter and believes he can make a contribution."A person close to the company, who requested anonymity, said speculation was premature, noting that there was nothing stopping the board from "giving Peter a contract that's more appropriate in this day and age." He noted that Boneparth's contract was considered atypical, given the focus on "good corporate governance."

The source said the company was not considering dismantling the firm, and that Jones had been working on removing the fat and cutting back on investments that don't produce the highest margins.

"You might see smaller brands go, the ones that are not capable of getting to $100 million or more in revenue,'' he said. "The capital has to be deployed more efficiently, and all these guys have to learn how to grow in a world that is not easy to grow in when Federated is their main customer."

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