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Financial and market sources said a prospectus is out on Nine West, the footwear firm Jones Apparel Group bought in 1999 for $1.48 billion.

NEW YORK — Jones Apparel Group chief executive officer Peter Boneparth is slowly recasting the empire that its founder and chairman, Sidney Kimmel, built.

Now Boneparth might be about to take the biggest step of all to shape Jones in his image: to sell Nine West. Financial and market sources said a book is out on the footwear firm, which Jones bought in March 1999 for $1.48 billion. Whether it will result in a sale is still uncertain. Brown Shoe Co. Inc., a competitor, is said to have looked at the company, while Vince Camuto of the Camuto Group is said to be contemplating a buyback of Nine West, which he co-founded in 1977.

Calls on Wednesday to executives at Jones and Camuto Group were not returned for comment at press time. A spokeswoman for Brown Shoe declined comment.

Boneparth, at a Bank of America Consumer Conference presentation here on Tuesday, acknowledged that because of the money that has to be put to use by financial players, prices were getting “pretty frothy out there.”

While Jones doesn’t need to make an acquisition, that frothy acquisition environment could also be an ideal time to make a divestiture.

Boneparth said that the company’s mind-set is to do what will “enhance shareholder value….What’s going to be the thing that’s going to maximize shareholder value, whether it be divestitures, acquisitions, stock buybacks, dividends, pay down debt…that’s how we think.”

Financial sources said Nine West does about $1 billion in annual wholesale volume, and about another $900 million or so in retail sales. A sale of the entire operation could bring in at least $2 billion for Jones, some Wall Street analysts predicted. In addition to footwear, the Nine West brand is a big player in the accessories business, from handbags to small leather goods. The company also has a small apparel component. The Nine West stable of brands includes Nine West, Enzo Angiolini, Bandolino, Easy Spirit and Pappagallo.

But the Nine West business has been struggling for several years. While the footwear sector is profitable, one Wall Street analyst noted it’s an area of little growth. The brand, however, generates a “decent amount of cash flow,” the analyst said.

This story first appeared in the March 16, 2006 issue of WWD. Subscribe Today.

He applauded the possible sale of the company, noting Jones has been on a “treadmill for five years” and that streamlining the business would perhaps allow Jones to focus on apparel, its core competency.

Another analyst also viewed the sale of Nine West as a “positive,” pointing out that while the business is fixable, it is not really Jones’ core specialty. She said the footwear brand was in need of a turnaround when Kimmel bought it and that over the years, Nine West has suffered through some “growing pains.”

Boneparth has made it clear in conference calls to Wall Street that Jones is looking at possible acquisitions in retail and in the contemporary sector. It is said to have eyed luxury retailer Saks Fifth Avenue last year as a complementary business to its Barneys New York operation, which it bought in December 2004 for $397.3 million. And bankers said earlier this week that Jones appears to be the leading strategic contender to purchase Kate Spade, now under the Neiman Marcus umbrella. However, Jones has competition in the Kate Spade bidding from several financial players.

An acquisition of a well-known branded firm at the higher end is the trend among strategic players these days. Jones also has eyed Vera Wang, which was pitched to Liz Claiborne and VF Corp. as well, bankers and apparel firm executives said. In the case of Jones, proceeds from a sale of Nine West, added to the $355 million it received from Polo Ralph Lauren when Jones sold the Polo Jeans business, could give Jones a substantial war chest to use for several acquisitions or for internal growth. That would include a significant expansion of Barneys, which Jones wants to build into a $1 billion-a-year retailer.

While the moderate businesses at Jones have suffered because of the retail environment in the department store channel, luxury is doing very well. At the Bank of America Securities presentation, Boneparth noted, “Luxury is still very, very healthy.” He told attendees that the footwear business in the luxury segment is outstanding, as is the handbag business.

“I think that trend with the footwear and handbag [business], it tends to continue to be a good category, where we see as you go up further on the price change, it’s even better….At Barneys, we cannot keep $2,000 handbags in stock,” he said.

For the year ended Dec. 31, Jones’ income was down 9.1 percent to $274.3 million, or $2.30 a share, from $301.8 million, or $2.39, a year ago. Revenues gained 9.1 percent, to $5.07 billion from $4.65 billion, which included a sales gain of 9.2 percent, to $5.01 billion from $4.59 billion, and a 4.4 percent increase in licensing income, to $59.6 million from $57.1 million.

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