Jones Apparel Group, which reported a second-quarter loss and lowered full-year guidance on Wednesday, said its board agreed that Fast Retailing Co. Ltd.'s $900 million cash offer for Barneys New York was superior to a previously accepted bid from Dubai-based Istithmar.
President and chief executive officer Wes Card, who replaced Peter Boneparth last month, said the company was not for sale and acknowledged there have been no offers for it. He intends to emphasize core brands: Jones New York, Anne Klein, Nine West and Gloria Vanderbilt. "Focusing on quality is built into my DNA at Jones," Card said. The board is "committed to investing in the good opportunities we have here."
"My first order is to develop a good strong plan for 2008 that we can execute against,'' he said in an interview. "We need to show the shareholders more consistency."
The company is working on its wholesale relationships, from strategizing to working on how to grow, Card said. He didn't rule out acquisitions, saying that Jones "is always looking" with an eye to "enhance shareholder value." Still, Card's plan for turning around Jones seems more focused on internal changes and getting those initiatives in place before adding brands.
Meanwhile, Jones' agreement with Istithmar, a private equity and alternative investment house, remains in place and the firm has "until the end of business on Friday" to disclose whether it wants to match the offer, Card said.
Jones said Tuesday that it had received the offer from Tokyo-based Fast Retailing, the owner of fast-fashion chain Uniqlo and an investor in contemporary brand Theory, which is not contingent on due diligence and can be closed quickly. The apparel giant on June 22 entered into an agreement to sell the luxury Barneys chain to an affiliate of Istithmar for $825 million in cash, subject to purchase-price adjustments. Jones would be required to pay a termination fee of $22.7 million if it withdraws from the accord.
Neither the executives at Istithmar nor the firm's bankers at Peter J. Solomon Co. could be reached for comment.
A spokesman for Fast Retailing said, "We are very pleased with the board's decision to declare our offer superior. Fast Retailing has the highest respect for the Barneys brand, management and creative teams, and would be an excellent strategic partner."
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