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Joe’s Jeans Signs French Distribution Pact

Advanced Retail will oversee operations in the country, including the Paris office.

Joe’s Jeans Inc. has struck a distribution agreement for France with Advanced Retail, the company which currently operates its shops-in-shop in the Galeries Lafayette and Printemps department stores.

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With the multiyear pact in place, Advanced will continue to operate the shops-in-shop and take over operations of the company’s office and showroom in Paris. They had been operated directly by Joe’s.

“By moving to a distribution model, we will reduce corporate overhead and increase profitability while preserving international growth potential,” said Marc Crossman, president and chief executive officer of Joe’s.

The distribution arrangement is similar to others in place in the U.K., Germany, Italy and Russia, the Los Angeles-based firm said.

Crossman told WWD that, at least in the immediate future, the company’s focus in Europe will remain on wholesale. “As I step back and look at our strategy, we would need a bigger business in Europe before we’d venture into retail, like we did in the U.S. for seven years,” he said. “I don’t think it will take us that long to move into retail in Europe, and a distributor allows to focus on building the identity of the brand and do more in-country advertising.”

The company, which recently introduced the lower-priced Else brand exclusively at Macy’s, reported in April that it more than quadrupled its first-quarter net income, to $794,000, on a 22.6 percent sales increase to $26 million. Retail accounted for 19.9 percent of revenues in the first quarter versus 17.4 percent in the year-ago period.

On a conference call to discuss the results, Crossman noted that European operations were down slightly in the period.

“We continue to believe the international market represents a sizable opportunity for us,” Crossman told analysts on the call. “We are currently renegotiating our contract with Japan and we are restructuring our operations in Europe. The end result should be increased sales and reduced costs.”

In addition to its European activities, Joe’s Jeans has a distribution and franchising arrangement covering the Middle East with MultiTrend International, part of the Al-Homaizi Group. MultiTrend operates two Joe’s stores, in Kuwait and Dubai, and plans to open another five. The company also serves as Joe’s distributor for wholesale ventures.

Shares of Joe’s Jeans Tuesday closed at 97 cents, down 2 cents, or 1.7 percent.