JONES APPAREL EXECS CASH IN ON GOOD TIMES
Byline: Thomas J. Ryan
NEW YORK — Bonuses flowed last year for the top executives at Jones Apparel Group.
Sidney Kimmel, chairman and chief executive, earned $2.83 million against $2.3 million, reflecting an increase in annual bonus to $1.35 million from $1 million, according to Jones’s just released proxy statement. He received a base salary of $1 million plus $480,000 in other compensation covering his car and clothing allowances and the cost of maintaining a company-owned apartment here.
Jackwyn Nemerov, president, earned $2.16 million, up from $1.51 million due to a higher bonus, and realized $7.9 million by exercising options on 291,168 shares of stock.
Eric A. Rothfeld, president and chief executive of the Sun division, which includes Polo Jeans, made $2.53 million, including a $1.67 million bonus. Rothfeld joined the firm after Jones’s acquisition of his former company, Sun Apparel, in October 1998. In his short stint in 1998, he received $643,894 from Jones.
Irwin Samelman, executive vice president of marketing, earned $1.65 million against $1.35 million, and Wesley R. Card, chief financial officer, $1.04 million versus $660,930.
Jones’s compensation committee noted that the higher bonuses were the result of improvement in earnings per share, cash per share and operating income, as well as Jones’s effectiveness in integrating Sun as well as Nine West Group, acquired in June 1999, into Jones’s operations.
Earnings last year rose 21.6 percent to $188.4 million, or $1.60 a share, from $155 million, or $1.47, a year ago. Sales surged 87.4 percent to $3.1 billion from $1.7 billion as a result of the Sun and Nine West acquisitions. Excluding the acquisitions, sales were up 1.9 percent, according to Jones’s 10K.
Jones’s 10K shows that its wholesale apparel segment had operating income of $381.9 million on sales of $1.99 billion versus 1998 levels of $281.2 million on sales of $1.5 billion. In its wholesale footwear and accessories segment, which consists its new Nine West footwear and accessories lines, operating income was $8.9 million on $464.5 million in revenues.
Retail, which includes both the stores acquired from Nine West and its Jones New York Outlets, achieved operating income of $42.2 million on sales of $670.6 million against profits of $18.1 million on sales of $169.1 million a year ago. At Dec. 31, the firm operated 970 specialty stores and 590 outlet stores.
Other tidbits from the 10K:
Jones’s 10 largest customers accounted for about 58 percent of sales in 1999, with Federated and May each at 14 percent.
Jones jacked up its advertising expense to $51.7 million last year from $14.7 million in 1998 and $5.4 million in 1997, reflecting the acquisitions and new launches. Jones does national advertising campaigns primarily in print magazines for Lauren by Ralph Lauren, Ralph by Ralph Lauren, Polo Jeans Ralph by Ralph Lauren, Jones New York, Nine West, Enzo Angiolini, Easy Spirit and Calvin Klein footwear and accessories.
Jones received $23.6 million from licensing of its major owned brands, including $12.7 million for Jones New York, $4.2 million for Evan-Picone, and $6.7 million for Nine West.
About 33 percent of its apparel products were manufactured in the U.S. and Mexico and 67 percent in other parts of the world, primarily Asia. Fifty-four percent of its footwear products were made in Brazil and China.