Both Moody’s Investors Service and Standard & Poor’s put their ratings on Jones’ debt on review for possible downgrade, noting the buyout could load Jones down with additional debt and lead to changes at the company. Moody’s rates Jones at “Ba3,” while S&P scores the company at “BB-minus.” The ratings are each three steps into non-investment-grade or “junk” territory.
Sycamore, which is led by Stefan L. Kaluzny, agreed last week to buy Jones for $15 a share, or $1.2 billion, plus another $1 billion in debt. Kaluzny is expected to break up Jones into four parts: the legacy footwear business and the denim business; an apparel company including Jones New York; Kurt Geiger, and Stuart Weitzman.
And while it’s not clear where Jones’ top leaders will stand in the new corporate structure, they will see nice payouts for their stock holdings.
Chief executive officer Wesley Card holds 1.4 million shares of Jones, mostly in restricted stock, valued at $20.3 million at the takeover price, according to regulatory filings. And Richard Dickson, president and ceo of the branded businesses, holds 930,124 shares, valued at $14 million. Together the two executives own 2.9 percent of the company and agreed to vote their shares in favor of the deal.
The takeover, which is expected to be completed in the second quarter, brings a good deal of uncertainty to the business.
“While we do not know what the composition of the capital structure will be following the transaction, we believe the company’s credit metrics could weaken if its financial sponsor influences financial governance toward shareholder-friendly strategies and the use of debt or debtlike instruments to maximize shareholder returns,” said Linda Phelps, a credit analyst at S&P.
Card sent a letter to employees after the deal was cut on Thursday noting that: “Today’s announcement will have no impact on your day-to-day responsibilities — it remains business as usual at The Jones Group.”
The letter included a list with questions it anticipated from its workers, including whether or not the deal would lead to layoffs.
“It is premature to speculate on this,” Jones said in its official answer. “Sycamore Partners will work with our management team and we will continue in our efforts to become more efficient and improve the company’s profitability. We are always looking at ways to restructure and become more efficient, as well as continue to deliver exceptional products.”
EXCLUSIVE: Two and half months after John Targon, cofounder and codesigner of Baja East, was hired as creative director of the contemporary division at Marc Jacobs, he has left the company, WWD has learned. Marc Jacobs International, which is owned by LVMH Moët Hennessy Louis Vuitton, confirmed Targon’s departure in a statement: “John Targon is a talented designer and we appreciate the work he has done here. Ultimately working together did not make sense for the brand and we wish him the best.” Read the story by @jessiredale, link in bio. #wwdnews
@theluxurycollection is officially launching a collection, tapping Sofia Sanchez de Betak for the capsule. Over 30 styles will be featured in the Chufy x The Luxury Collection, debuting next month at Bergdorf Goodman, The Webster, FiveStory and more. De Betak, known as “@chufy,” drew inspiration for the collection from her trips to Japan in the past year #wwdfashion
@lhd, founder and CEO of @thewebster, has teamed up with @lebonmarcherivegauche for the European launch of her ready-to-wear line, LHD. The launch will come with an exclusive pop-up opening today that’s set to run through May 20. Located on the second floor, it carries her debut Miami-themed resort collection, launched in November as see-now-buy-now. #wwdfashion
@longchamp, which marks its 70th anniversary this year, just opened its biggest U.S. store on Manhattan’s Fifth Avenue. On the lower level there’s a floor-to-ceiling display of the brand’s iconic Le Pliage bag – in all of its different colors, shapes and sizes. Customers can also have their product personalized in-store by imprinting names, initials or emblems. #wwdfashion (📷: @ericmtownsend)
“Whenever I’m in that place of sound and music, I don’t have fear or nervousness…This album has a lot of themes of courage and boldness and I want to be the soundtrack for people’s lives. I’ll be so happy if [my songs] evoke strength in people, which I know music has done for me,” says @kimbramusic of her newest album “Primal Heart.” The New Zealand-born singer sat down with WWD to talk about her music, newest tour and connecting with hear fans — read more on WWD.com #wwdeye (📷: @jilliansollazzo)
Luxury handbag resale company @rebagofficial is planning to sell a rare collectible for $70,000: the @hermes White Crocodile Himalayan Birkin. The exclusive Birkin sold for about $100,000 in 2008, when @davidbeckham bought one for his wife @victoriabeckham to add to her collection. Read more about the rare Birkin on WWD.com #wwdaccessories
With her costume pearl necklace and what-you-see-is-what-you-get style, Barbara Bush, who died Tuesday at age 92, was a straight-shooter from start to finish.
Born Barbara Pierce in New York City, Bush served as the 37th first lady, as well as the country’s second lady from 1981 to 1989. In addition to being part of the longest presidential marriage — 73 years — Bush also had the unlikely distinction of having one son, George W., become the 43rd president and another son, Jeb, run unsuccessfully in 2016. Having served as second lady during the Reagan administration’s two terms and lived all over the world during her own husband’s ascending political career, Barbara Bush made it clear that literacy — not fashion — was her priority. Read more from Rosemary Feitelberg’s obituary on the late First Lady in WWD.com, link in bio. #barbarabush #wwdnews
Western and ’90s trends have influenced denim for fall 2018. Think raw, dark and coated jeans mixed with bold prints and tough leather. #trendtuesdays #wwdfashion (Styled by @thealexbadia;📷: @ryanplett)