NEW YORK — Jones Apparel Group chief executive officer Peter Boneparth is slowly recasting the empire that its founder and chairman, Sidney Kimmel, built.
Now Boneparth might be about to take the biggest step of all to shape Jones in his image: to sell Nine West. Financial and market sources said a book is out on the footwear firm, which Jones bought in March 1999 for $1.48 billion. Whether it will result in a sale is still uncertain. Brown Shoe Co. Inc., a competitor, is said to have looked at the company, while Vince Camuto of the Camuto Group is said to be contemplating a buyback of Nine West, which he co-founded in 1977.
Calls on Wednesday to executives at Jones and Camuto Group were not returned for comment at press time. A spokeswoman for Brown Shoe declined comment.
Boneparth, at a Bank of America Consumer Conference presentation here on Tuesday, acknowledged that because of the money that has to be put to use by financial players, prices were getting "pretty frothy out there."
While Jones doesn't need to make an acquisition, that frothy acquisition environment could also be an ideal time to make a divestiture.
Boneparth said that the company's mind-set is to do what will "enhance shareholder value....What's going to be the thing that's going to maximize shareholder value, whether it be divestitures, acquisitions, stock buybacks, dividends, pay down debt...that's how we think."
Financial sources said Nine West does about $1 billion in annual wholesale volume, and about another $900 million or so in retail sales. A sale of the entire operation could bring in at least $2 billion for Jones, some Wall Street analysts predicted. In addition to footwear, the Nine West brand is a big player in the accessories business, from handbags to small leather goods. The company also has a small apparel component. The Nine West stable of brands includes Nine West, Enzo Angiolini, Bandolino, Easy Spirit and Pappagallo.
But the Nine West business has been struggling for several years. While the footwear sector is profitable, one Wall Street analyst noted it's an area of little growth. The brand, however, generates a "decent amount of cash flow," the analyst said.He applauded the possible sale of the company, noting Jones has been on a "treadmill for five years" and that streamlining the business would perhaps allow Jones to focus on apparel, its core competency.
Another analyst also viewed the sale of Nine West as a "positive," pointing out that while the business is fixable, it is not really Jones' core specialty. She said the footwear brand was in need of a turnaround when Kimmel bought it and that over the years, Nine West has suffered through some "growing pains."
Boneparth has made it clear in conference calls to Wall Street that Jones is looking at possible acquisitions in retail and in the contemporary sector. It is said to have eyed luxury retailer Saks Fifth Avenue last year as a complementary business to its Barneys New York operation, which it bought in December 2004 for $397.3 million. And bankers said earlier this week that Jones appears to be the leading strategic contender to purchase Kate Spade, now under the Neiman Marcus umbrella. However, Jones has competition in the Kate Spade bidding from several financial players.
An acquisition of a well-known branded firm at the higher end is the trend among strategic players these days. Jones also has eyed Vera Wang, which was pitched to Liz Claiborne and VF Corp. as well, bankers and apparel firm executives said. In the case of Jones, proceeds from a sale of Nine West, added to the $355 million it received from Polo Ralph Lauren when Jones sold the Polo Jeans business, could give Jones a substantial war chest to use for several acquisitions or for internal growth. That would include a significant expansion of Barneys, which Jones wants to build into a $1 billion-a-year retailer.
While the moderate businesses at Jones have suffered because of the retail environment in the department store channel, luxury is doing very well. At the Bank of America Securities presentation, Boneparth noted, "Luxury is still very, very healthy." He told attendees that the footwear business in the luxury segment is outstanding, as is the handbag business.
"I think that trend with the footwear and handbag [business], it tends to continue to be a good category, where we see as you go up further on the price change, it's even better....At Barneys, we cannot keep $2,000 handbags in stock," he said.For the year ended Dec. 31, Jones' income was down 9.1 percent to $274.3 million, or $2.30 a share, from $301.8 million, or $2.39, a year ago. Revenues gained 9.1 percent, to $5.07 billion from $4.65 billion, which included a sales gain of 9.2 percent, to $5.01 billion from $4.59 billion, and a 4.4 percent increase in licensing income, to $59.6 million from $57.1 million.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“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)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)