NEW YORK — The bidding has begun for all or part of Jones Group Inc.
The company hired Citi as its investment bank to explore options, and according to financial and market sources, the first round of bids was due on July 19. Currently, offers are being accepted for three options: the entire firm, the apparel division and the footwear business. Financial sources said there were bids submitted for each option, but it couldn’t be determined what firms were bidding for which business. Sources said both strategic players and financial sponsors have expressed interests in the different options.
Both market and financial sources have speculated that there may be even more potential bidders if Jones were to split up the brands within each unit and sell them individually. For example, while neither Delta Galil Industries Ltd. nor Vince Camuto Group has submitted any offers for the apparel or footwear divisions, respectively, both are said to be interested in specific segments of the brands under Jones’ umbrella. Delta in 1999 had been in negotiations with Jones for its denim division for between $350 million and $400 million. Those discussions did not result in any deal, but Delta’s chief executive officer, Isaac Dabah, is said to be still interested in the jeanswear business, which includes Gloria Vanderbilt, the company he sold to Jones in 2002 for $138 million. Similarly, the speculation with Camuto is that Vince Camuto would like to buy back Nine West, which he sold to Jones in 1999 for nearly $900 million. RELATED STORY: Jones Enlists Citi to Explore Options >>
Wes Card, Jones’ ceo, told analysts before the start of the conference call’s Q&A session that executives on the call would not be addressing market rumors or questions regarding M&A activity. Card also declined to comment on questions regarding the bidding process during a telephone interview.
The quarter’s results were boosted by strong sales in jeanswear and the company’s international wholesale footwear businesses. Its domestic wholesale sportswear division remained the laggard in the period. And while the results were better than expected, Card told Wall Street he’s pleased the company is making progress, but at the same time, “I do recognize that our results require substantial improvement.”
For the three months ended July 6, the net loss was $3.4 million, or 5 cents a diluted share, against net income of $8.1 million, or 10 cents, last year. On an adjusted basis, excluding restructuring costs in both periods, earnings per share were 2 cents versus 22 cents a year ago. Adjusted EPS of 2 cents was better than Wall Street’s expectations of a loss 12 cents a share.
Total revenues for the quarter fell 1.1 percent to $845.6 million from $854.8 million, which included a 1.1 percent decline in net sales to $835.2 million from $844.3 million. Wall Street was expecting $832.1 million in revenues for the quarter.
Of six business segments, three saw gains in the quarter. Jeanswear led the charge, with revenues up 20.9 percent to $182.6 million. International wholesale sales increased 17.6 percent to $88.7 million, and international retail rose 3.9 percent to $101.1 million. Of the three that were down, domestic wholesale sportswear sales fell the most, declining 23.7 percent to $133.3 million. Domestic wholesale footwear and accessories declined 7.1 percent to $181.6 million, and domestic retail decreased 1.7 percent to $148.1 million.
For the six months, the loss was $2.9 million, or 4 cents a diluted share, on a 3.7 percent gain in total revenues to $1.83 billion. That compares with net income of $6.9 million, or 9 cents a share, on total revenues of $1.77 billion a year ago.
Card told Wall Street analysts that initiatives to improve profits and turn around the sportswear business “are expected to improve annual profitability by approximately $40 million when we get to mid-2014, and we’re well on track to achieve these results.”
In an interview, Card said, “The macroeconomic feeling is pretty solid, with slow, steady and continuous improvement.” He explained that from the firm’s different businesses here and overseas, the “early reads of fall product are encouraging in the outlets, some of our doors and online.”
Inventory levels are in good shape overall in retail, Card said, noting that while there were promotions in the second quarter to move seasonal goods, orders are being planned conservatively in the back half. The ceo said Jones can move quickly on replenishment items and will chase sales where it is deemed appropriate.
Card also said that casual dressing has been a strong category, and “jeanswear fits right into that.…Every one of our lines has great fit no matter who is the targeted consumer. We have strong product in a strong category.”
The company is preparing for a big launch of its Kurt Geiger footwear business into the wholesale channel in the U.S., with the brand about to show in Nordstrom doors “shortly.” He said Jones is still in talks with other retailers about including the Kurt Geiger brand in their doors.
Richard Dickson, president and ceo of Jones’ branded businesses, noted that the company is in the early stages of introducing QMack, the new line exclusively at Macy’s that targets the Millennial customer.
He added that Jones Works, an extension of the suiting and suit separates of the Jones line, will launch nationally next month, although some items have already flowed into select Jones outlet stores where the early read has “exceeded plan with a 10 percent sell-through in the first week.”
Shares of Jones closed up 1.8 percent to $16.42 Wednesday in trading on the New York Stock Exchange.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast