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."Jones said separately that for the quarter ended July 7, the company posted a loss of $47.1 million, or 44 cents a diluted share, compared with income of $36.6 million, or 32 cents, in the same year-ago period. The most recent quarter included a write-down associated with the brands that the company has decided to sell. Excluding results of discontinued operations and restructuring costs, adjusted earnings were 17 cents a diluted share versus 39 cents last year. Total revenues fell by 2.2 percent to $903.9 million from $923.9 million, which includes a sales decline of 1.7 percent to $894.5 million from $909.6 million.
For the six months, the loss was $800,000, or 1 cent a diluted share, against income of $62.5 million, or 55 cents, in the same year-ago period. Total revenues slipped by 1 percent to $1.98 billion from $2 billion, which included a slight decline in sales by 0.7 percent to $1.96 billion from $1.97 billion.
Jones said it expects 2007 full-year adjusted earnings per share to be between $1.28 and $1.34, versus previous guidance of $1.95 and $2.05.
The company expects to complete the sale of certain smaller sportswear brands, including moderate apparel brand Erika and the footwear and accessories label Pappagallo, which it determined were not necessary for its core operation, Card said.
Jones' plan is to concentrate on the upper moderate market because "We're not really geared to do entry-level moderate price points," Card said.
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews