NEW YORK — The reduction in third-quarter projections from Jones Apparel Group last week might spell trouble for the broader industry.

Blaming a lackluster consumer and the weather, particularly the several hurricanes that slammed the Southeast, Jones said comparable-store sales in its own doors fell 1.9 percent for the three months ended Oct. 2, compared with the projected gain of 3 to 4 percent. Accordingly, the firm’s third-quarter earnings projections were revised to a range of 75 cents to 77 cents from the previous guidance of 80 cents to 84 cents.

The weakness that caused this shortfall might ripple throughout the industry, said analysts.

“Channel inventory is not high, but soft sales in the department store and mass channels are likely to cause uncomfortably high inventory levels, which keep store executives up at night and cause accelerating markdowns,” said Lazard Frères equity analyst Todd Slater, in a research note on Kellwood Co.

Slater reduced his fourth-quarter earnings estimate for Kellwood, citing “persistent weakness in the retail channel due to softening consumer spending.”

The analyst lauded Kellwood for its new product initiatives, but said higher gas prices are impacting moderate businesses and could cause shortfalls in brands such as Sag Harbor and Koret. Kellwood has a slate of recent additions, including Calvin Klein and Izod sportswear, and XOXO junior apparel, each produced under license.

On the other hand, Slater noted that Jones’ moderate business, which includes brands such as Bandolino and Norton McNaughton, seems to be tracking ahead of expectations, while that firm’s better business hasn’t performed as well.

“Given the warnings we’ve seen from all the career-centric specialty stores — i.e., Ann Taylor, Talbots, J. Jill — it should, frankly, come as no big surprise that Jones is also missing plan in this category,” Slater said. “After all, Jones occupies the largest career space in the department store channel, and as goes career, so goes Jones.”

The company also cited weakness in its footwear business as contributing to the shortfall.

Despite these dour signs, the Commerce Department recently said department store sales increased a seasonally adjusted 0.9 percent in September, but were down 1.3 percent against a year ago.

This story first appeared in the October 20, 2004 issue of WWD. Subscribe Today.

In the case of Liz Claiborne Inc., David Griffith, equity analyst at Tradition Asiel Securities, said he wasn’t concerned.

“Liz really isn’t exposed to footwear, which I think was a big problem for Jones,” said Griffith. “That’s not to say that they may not be a little more conservative on fourth-quarter guidance and the like.”

— E.C.