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.”
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)
The @cfda has shifted the dates of #NYFW, with Men’s showing on February 5 through February 7, and Women’s will directly follow, running from February 8 through 14. The preliminary schedule will be released on the CFDA’s web site in the next few days, but Mark Beckham, VP of marketing for the CFDA, revealed that @rafsimons will be back to close the men’s-specific part of the week with a show on February 7 #wwdfashion (📷: Kelly Taub)
@ferragamo is introducing a new space dedicated to the development of women’s and men’s leather good samples. The laboratory, which is created eco-friendly materials and designed to reduce the environmental impact of the manufacturing processes, will allow the company to expand its accessories offering through traditional artisanal approaches. #wwdfashion (📷: @aitorrosasphoto)
How does a “regular, degular, schmegular” girl from the Bronx, N.Y., become a Grammy-nominated artist with a certified platinum record in less than a year? Call it the @iamcardib come up. The 25-year-old has become a musical sensation, and the fashion world is taking note. “If I could describe her style I would say drama. She’s really into the dramatics,” says Cardi B’s stylist @kollincarter. See how Carter styles her bold and out there looks with the link in bio. #wwdfashion
“There is no formula. There is no guideline. I can watch Ted Talks all day, but there is no one who can advise me on exactly what it is I should be doing,” said @ronniefieg, CEO of @kith, in an interview with WWD’s @ariahughes at the brand’s new SoHo office in Manhattan. Head to WWD.com to see how Fieg went from hanging out in shoe stockrooms at 13 to building his own business. #wwdfashion (📷: @weston.wells)
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion