The finish line is in sight for The Jones Group Inc.
The last of the second-round bids in the Citi-led auction to sell the company are expected to come in today, according to sources.
It’s still not clear if Jones is more likely to be sold as a whole or if bidders interested in different parts of the firm will collectively emerge with the strongest offer.
Private equity giant KKR & Co. and Sycamore Partners have paired up for a bid and are believed to be a formidable presence in the process. Leonard Green & Partners and Golden Gate Capital have also each expressed interest in the firm or in certain of its businesses, while Iconix Brand Group Inc. is said to have taken a look at the apparel side of the company.
Officials at Jones, as well as KKR, Sycamore, Iconix and Golden Gate, all declined to comment. Leonard Green could not be reached.
One observer said it would be difficult, but not impossible, to sell off the company’s wide-ranging footwear and apparel businesses in parts.
“The complexity of unraveling this and combining it in a way that’s equitable between multiple parties is tremendously complex,” the source said. “When you have to carve three different elements out of the current operations and you’re looking at transition agreements, you’re looking at master licenses, you’re looking at offices that are shared.”
Even if one party buys all of Jones, it’s expected that they will turn around and spin off smaller pieces of the business. There are a host of strategic bidders on the sidelines of the process that are interested in snatching up one or more of the company’s brands.
Shares of Jones have jumped 10.7 percent since word the company was on the block started to spread in early July. The stock gained 1.8 percent to $16.20 on Friday, leaving it with a market capitalization of $1.18 billion. Along with debt, that gives the company an enterprise value of $1.99 billion.
Jones has a portfolio of 35 brands, ranging from Kurt Geiger and Stuart Weitzman in the upper tier to Jones New York and Anne Klein in the midtier, and Gloria Vanderbilt and Easy Spirit in the moderate channel. It also owns the successful Nine West footwear business.
Jones has been under pressure to tighten up its operations. Activist investor James Mitarotonda, chairman and chief executive officer of Barington Capital Group, took a stake in the firm and was given a spot on its board in June. While it is unclear whether Mitarotonda’s stake spurred Jones’ action, he has a history of agitating aggressively for change at the companies he invests in. Jones executives have said they were reevaluating the business long before he took his stake.
The sale of Jones seems destined to mark the final turning of the page for Seventh Avenue, where Jones, along with the former Liz Claiborne Inc. and Kellwood Co., used to hold significant sway, with large portfolios of brands aimed at department stores. That influence fell away as the company’s sought a new direction following the merger of Federated Department Stores Inc. and May Department Stores Co. and the rise of strong, branded monobrand players, including Michael Kors Holdings Ltd. and Tory Burch.