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.”
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye