Barington Capital Buys Stake in The Jones Group

Activist investor plans to push for the group to sell off some smaller brands and tighten up operations.

Shares of The Jones Group Inc. rose 5.9 percent Friday on word that activist investor Barington Capital had taken a stake in the firm and was pushing for it to sell off some smaller brands and tighten up operations.

This story first appeared in the April 15, 2013 issue of WWD.  Subscribe Today.

The stock closed up 78 cents to $14.07 and climbed as high as $15.07 in midday trading. More than 4.7 million shares traded hands Friday, well ahead of the three-month average 742,789 shares.

A company spokeswoman said, “The Jones Group confirms that Barington holds approximately 2 percent of our stock and that Jones has met with Barington at Barington’s request. We always consider and respect the views of our stockholders and do not comment on individual discussions with them.”

The spokeswoman added that the company remains committed to its mission of enhancing stockholder value “through creating the leading global fashion company defined by premier brands and driven by exceptional talent.”

Jones has a portfolio of 35 brands, but according to an investor presentation from March, it has just six “core brands” and six “emerging brands” with higher margin opportunities.

The core brands include Nine West, Jones New York, Anne Klein, Gloria Vanderbilt, L.E.I. and Easy Spirit. Collectively, they represent 62 percent of the company’s net revenues. The emerging brands are Stuart Weitzman, Kurt Geiger, Robert Rodriguez, Rachel Roy, Jessica Simpson and Brian Atwood.

Beyond those 12 businesses, Jones markets brands with somewhat less traction in the market, such as Robbi & Nikki, Bandolino, Enzo Angiolini, Le Suit, Mootsies Tootsies, Grane, Erika, Napier and Albert Nipon.

Although Jones’ stock saw a nice gain Friday, it has a market capitalization of just $1.03 billion — below that of competitors such as Fifth & Pacific Cos. Inc., at $2.56 billion; PVH Corp., at $8.88 billion, and Ralph Lauren Corp., at $15.79 billion.

A Barington spokesman said, “We’re not in the practice of commenting publicly on companies we’re engaged in private discussion with.”

The Wall Street Journal first reported Barington’s interest in the company on its Web site Friday.