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Jones Tops Estimates, but Posts Net Loss in Quarter

Structured sportswear and retail remain “challenging and promotional.”

NEW YORK — The Jones Group Inc. will continue to make a bigger push in footwear, jewelry and handbags in 2013, the same categories that resonated well with consumers in the fourth quarter and in 2012.

This story first appeared in the February 14, 2013 issue of WWD.  Subscribe Today.

The company on Wednesday posted fourth-quarter results that beat Wall Street’s expectations even though it still reported a loss for the quarter, hurt in part by the structured sportswear and retail businesses.

For the three months ended Dec. 31, the net loss widened to $80.3 million, or $1.06 a diluted share, from $21.1 million, or 27 cents, a year earlier. On an adjusted basis, excluding charges related to impairments of certain intangible assets and the impact of severance in connection with restructuring activities, the company earned 14 cents a share, beating Wall Street’s consensus estimate by 5 cents. Total revenues rose 8.8 percent to $971.9 million from $893.6 million, which included a 9.1 percent gain in net sales to $958.3 million. The balance of revenues was from licensing income and other revenues.

 

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For the year, the company reported a net loss of $56.1 million, or 72 cents a diluted share, against net income of $50.7 million, or 61 cents, in 2011. Revenues inched up 0.3 percent to $3.80 billion from $3.79 billion.

Shares of Jones rose nearly 0.3 percent to close at $12.09 in trading on the New York Stock Exchange.

Wes Card, chief executive officer, said in a telephone interview that the company, which closed 103 stores last year and about 500 doors since it began its retail door review process four years ago, will likely close 50 more units in 2013. According to Card, the decision will be made when leases come up for renewal. Most of the doors that will be impacted are the company’s outlet stores.

While the structured sportswear business and retail channels continue to remain challenged, Card expects last year’s “slow and steady improvement in the economy” to continue into 2013. In addition, he expects the continuation of strong selling trends for footwear and accessories.

The company is planning on expanding jewelry and handbag offerings for its Nine West line, Anne Klein brand, and in its growing Rachel Roy and Brian Atwood businesses.

The company’s two core denim brands, Gloria Vanderbilt and L.E.I., did particularly well in the fourth quarter. According to Card, Wal-Mart’s intensified support for L.E.I., with new product with April deliveries, helped the line throughout 2012. “Sales were up and margins were way up,” he said. As for Gloria Vanderbilt, the ceo said the company updated all the basics for the line by June, along with updated washes and finishes, and was one of the first lines to come out with color and print.

Richard Dickson, president and ceo, branded businesses, said the denim team is taking the learnings from the two brands and leveraging it to the Jones New York sportswear line, where Signature denim is featuring secret slimming technology.

Dickson also spoke briefly about the Jones New York line for fall, which will officially show in March, although there have been limited previews of the line to most of its major accounts. “The reaction has been very favorable,” he said, describing the overhaul for fall as a return to the Jones New York career wear roots. He also said the changes are “extending to a whole new system of dressing.”