NEW YORK — In the 10-minute-long annual meeting held here at Bear, Stearns & Co.’s Madison Avenue offices, Peter Boneparth, Jones Apparel Group’s chief executive officer, recapped the company’s year of “much change” and unsatisfactory financial performance.
Boneparth said that although he isn’t satisfied with the company’s earnings, Jones is in good shape for future success, especially with the acquisition of Barneys New York; the company purchased Barneys in December for $397.3 million and aims to turn it into a $1 billion business, with aggressive expansion plans and as many as 10 flagship openings by 2008.
“There’s been some concern about Jones’ ability to run Barneys,” Boneparth pointed out, since this is its first entry into the luxury retail sector. He assured stockholders the partnership is “going very well.”
But he admitted the company has challenges ahead, stating “new realities of the market,” most importantly keeping up with customers and offering them merchandise at a much faster pace — a challenge it will meet in the coming year, he said.
Another challenge Jones will face involves concerns brought up by one audience member, Matthew Rice, a campaign coordinator for People for the Ethical Treatment of Animals. “We’ve contacted Jones numerous times asking it to help stop the Australian wool trade by boycotting the wool,” he said, alleging that Australian sheep farmers treat their animals poorly by shaving off their wool and their skin and getting rid of sick and injured sheep by throwing them overboard during exportation. Rice said that Jones hasn’t done its part in the boycott, but Boneparth insisted the company is not ignoring the situation.
“We share your concern,” Boneparth said. “And we are working with you and the wool industry to understand these issues.” Boneparth said the wool industry is planning to rid Australia of these poor conditions by 2010, and Jones is working to make sure that will happen sooner than that.
Jones, which wrapped up a trying 2004 with heavy holiday promotions and some difficulties keeping the Jones New York Signature collection on trend, had an 8.2 percent slide in earnings to $301.8 million for the fiscal year ended Dec. 1, versus $328.5 million a year ago. Revenues for the year rose 6.3 percent to $4.65 billion from $4.38 billion a year ago.
Despite the earnings decline, Boneparth closed the meeting stating: “This company is rock-solid financially, and while we have an enormous amount of work ahead of us, I feel really good about where we are going.”