NEW YORK — “If we were at a football game, I would say we’re in the second half,” said Richard Dickson, president and chief executive officer of branded businesses at The Jones Group Inc., when asked to describe how the turnaround of the sportswear business was progressing.
After several challenging seasons, Jones has reworked the namesake sportswear lines for fall, going back to the strengths and the heritage of the brands, and lowered price points in an effort to win back its customer. It has also launched a new collection for fall called JonesWorks, a style system that simplifies the modern woman’s work wardrobe with key pieces that are “made to mix.”
“Clearly, the stakes are getting higher and the crowds are getting more excited. I look at balancing restless with patience. It’s a big business; it’s a complicated business at a complicated time,” said Dickson, who was interviewed at his spacious offices at 1411 Broadway here.
There’s no question that the Jones New York brands, particularly Jones New York Collection, have been struggling at retail, but Dickson believes the worst is behind them. He admitted the company dialed up too much fashion last year, and the customer rejected what was on the selling floor. All this is happening at a time when the corporation is going through a major transition, putting less emphasis on sportswear and more focus on accessories, footwear and jewelry. Jones sportswear has become a smaller piece of the pie, as accessories and footwear accelerate. In 2012, sportswear accounted for 27 percent of group revenues, versus 31 percent the previous year. Footwear and accessories (led by Nine West) generated 52 percent of the business, versus 48 percent in 2011. Jeanswear, which has been a steady performer at the company, remained at 20 percent of the business. (See related chart.) RELATED STORY: Jones Tops Estimates, but Posts Net Loss in Quarter >>
Overall, Jones reported a net loss of $56.1 million on revenues of $3.8 billion in 2012. Of that, the Jones New York brand accounted for 16.9 percent, or $643 million, of total revenues, down from 19.1 percent, or $725 million, in the previous year.
Jones has been buying new businesses to help fuel its growth. The firm paid an initial $180 million for a 55 percent stake in Stuart Weitzman in 2010 and bought the rest of the company for an undisclosed sum at the end of last year. It also shelled out more than $324 million to buy Kurt Geiger and its debts in 2011.
But investors are cautious as the core sportswear remains a drag. Jones’ total market capitalization weighed in at just $926.5 million — well below Fifth & Pacific Cos. Inc.’s $2.49 billion, PVH Corp.’s $7.75 billion or Ralph Lauren Corp.’s $15.28 billion.
According to industry sources, Jones’ sportswear business is being squeezed by such brands as Lauren Ralph Lauren, Michael Michael Kors, Calvin Klein and Vince Camuto, as well as private label, on the better price selling floor of department stores. Last year, Jones made the line younger and changed the fit, which alienated its traditional customer, said sources. In addition, the fall 2012 line featured a lot of luxe and heavyweight fabrics, as well as furs, which the Jones customer bypassed — and the collection was priced too high.
Dickson conceded the company had sportswear problems but is in the process of fixing them. He explained that Jones New York has been operating in the traditional space of the sportswear segment, which has been challenged. Since he arrived at Jones three years ago, the company has tried to reinvigorate the Jones New York brand and personify it with destination key items. The brand was built on career sportswear and the group has now returned to that concept with an emphasis on suits, easy-care shirts and denim.
“She wants classic; she wants to be perceived as fashionable and not trendy. It’s a sophisticated look she’s after. There has to be the right fit, function and value,” said Dickson of the core Jones customer, who he said is 45-plus. “She’s a mature, educated, American woman. She’s either in her career or has retired. We have Signature, which is polished casual, and Collection, which is more of our career-driven sportswear line.”
Last June, Jones hired George Sharp as executive vice president of design, reporting to Stefani Greenfield, chief creative officer. Sharp was previously creative director and executive vice president of design at St. John Knits. Before that, he was vice president of design at Ellen Tracy. “We got lots of responses from retailers that it [the fall 2013 collection] was a return to the heritage of Jones, but even better. We’re more on brand today, and moving forward into fall, than we have been since I got here,” said Dickson.
Dickson noted that the fashion element of the business, which struggled at retail, “clouded the success of the key core item basics business, which we’ve been pushing over the last couple of years. Now that the dust has settled on the year, we’re dialing things up and down to try and figure out what the right, meaningful initiatives will be that will not only stabilize the brand, but set the brand up for healthy growth in the future.”
The newest initiative is called JonesWorks, which hits stores in August. The collection is a system that offers solutions for career dressing.
“We really introduce styles that work as a core base to her wardrobe, but then can also be updated each month with new fashion elements. It’s really to make it easier for her to shop and to go into the store and update her current wardrobe,” said Meredith Page, senior vice president of sales at Jones. The line features 25 styles, such as pencil skirts, pants, jackets, sheath dresses, knit tops, blouses and easy-care shirts that can be mixed and matched. It is aimed at Jones’ core customers, as well as younger consumers who are looking to buy their first interview suit or work wardrobe.
“It’s investment dressing for this customer,” added Sharp. JonesWorks focuses on neutrals such as gray, navy, black, camel and bright red, as well as herringbones, glen plaids and pinstripes. Each of the styles is named, and the hangtags will make suggestions such as “We love this Meredith jacket with this Lucy pencil skirt.” Most of the line is made of polyester viscose, and everything has stretch. Pants, for example, range from narrow ankle-length pants to full wide styles, with several in between. Skirts run the gamut from pencil to boot to below the knee. “For the price point, you can get a great looking suit for around $200,” said Sharp. He said the basic pieces can be mixed with more of the fashion and novelty pieces in Jones New York Collection.
JonesWorks will be sold in stores such as Macy’s, Bloomingdale’s, Dillard’s and Belk and will hang near Jones New York Collection, said Page. Jackets retail for between $129 and $139, skirts are between $69 and $79, pants are between $89 and $99, cardigans are between $79 and $89 and core shells and knit tops go from $29 to $59, said Page. The collection is sized 2 to 16; knits are extra small through extra large, and there are also petites and women’s sizes.
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