Kimmel Relinquishes CEO Title At Jones, Nemerov Resigns
NEW YORK -- Turning the page in one of Seventh Avenue's longest success stories, Sidney Kimmel said Monday he will step down as chief executive officer of Jones Apparel Group in May, 32 years after founding the...
NEW YORK -- Turning the page in one of Seventh Avenue's longest success stories, Sidney Kimmel said Monday he will step down as chief executive officer of Jones Apparel Group in May, 32 years after founding the sportswear giant.
Succeeding Kimmel at the $4 billion firm will be Peter Boneparth, president and ceo of the firm's moderate division, who has been named president of the firm and will become ceo following the company's annual meeting May 22. Jackwyn Nemerov, who had been president and chief operating officer, has resigned.
But Kimmel, who will remain chairman, said he's not getting ready for retirement.
"It's very simple. I worked with Jacki as president and now I'll work with Peter as president, but my day-to-day duties will not change," Kimmel said. "He will just make my life a little easier and I hope we work together as a team. But I have no plans to retire ...maybe when I'm 90. What this does is answer the question of succession within the company.
"I'm looking forward to the change Peter will bring -- a young spirit to the company. And as long as he continues to embrace the spirit that made Jones successful for the past 32 years, I'm more than delighted."
Kimmel even declined to say that the change in titles will allow him more time to devote to his philanthropic endeavors. At 74, he's touted as Philadelphia's biggest philanthropist, having contributed some $200 million to medical research, $5 million to the Holocaust Memorial Museum in Washington and additional millions to other institutions and charities. He also owns a movie studio -- whose credits include "9 1/2 Weeks" and "Blame It on Rio."
There's even a Performing Arts Center named after him -- the Kimmel Center for the Performing Arts in his home town Philadelphia -- to which he gave $30 million to build.
"I do most of my philanthropic work on weekends and in my spare time," he said. "Just my day-to-day will be lessened."
Nemerov could not be reached for comment.
Boneparth, 42, a former investment banker and lawyer who joined McNaughton Apparel Group in 1997 as president and chief operating officer and later became ceo, said he's looking forward to the increased responsibilities -- such as learning about better sportswear, which Nemerov oversaw -- and to working closely with Kimmel. Jones purchased McNaughton Apparel last year."My relationship with Sidney goes back to my Wall Street days," Boneparth said. "+And from the day I got here, Sidney has embraced me, and the issues particular to the better business I have been privy to discuss. But I do feel I've evolved where I understand the concerns and highlights of this point, and whether we call it 'better' or 'moderate,' it's only about product and we're a product-driven company. It's about product and people and training -- it's an evolution. But it's not like I'm stepping into this cold."
As part of the restructuring, Wesley Card, chief financial and operations officer, will be promoted to chief operating and financial officer. In another move, Robert Kerrey, president of Manhattan's New School University and former governor and Senator of Nebraska, was named to to the Jones board.
Kimmel said: "I believe these appointments provide the next logical step in management succession for the company. Peter has my full support, along with the support of the board of directors, to lead Jones Apparel Group toward our goal of becoming the largest and most profitable company in our industry."
Card said the groundwork for succession of leadership was first established last October, with the formation of the executive committee that designated individual leaders overseeing specific businesses within Jones.
"That committee has been operating the day-to-day operations in those roles and will continue as it is," Card said. "But with Jacki having resigned last week, it gave time for the board to decide what it wanted to do."
Meanwhile, the leadership change came as no surprise on Wall Street, where analysts view Boneparth as a logical candidate for a ceo position.
For the year ended Dec. 31, income dropped 22 percent to $236 million, or $1.82 a diluted share, from $302 million, or $2.48, in 2000. Revenues were essentially flat at $4.1 billion.
For the fourth quarter, Jones posted net income of $31 million, down 51 percent from the same 2000 quarter. Sales fell 7.8 percent to $887 million. The bottom line was hurt by heavy promotions and markdown support.
Boneparth said during a conference call to Wall Street analysts in February, when earnings were announced, that moderate was "slightly less prone to some [of the] problems than the better market," and that the division entered 2002 with inventory in "exceedingly good shape."Boneparth said the firm wanted to expand the moderate division so it represents a larger part of the revenue base.
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