NEW YORK — Peter Boneparth, Jones Apparel Group’s chief executive officer and one of fashion’s biggest deal makers, expects even more industry consolidation down the road.
“A small number of companies in this industry will end up being much larger,” he said after the firm’s annual meeting Wednesday, held here at Bear, Stearns & Co.’s Madison Avenue offices.
Despite a busy year for the company in 2003, Boneparth said Jones will continue to be a major player in that consolidation.
Rather than focusing on how large Jones will ultimately be, Boneparth is concentrating on how to increase sales by double digits. In addition to organic growth, Jones plans to maintain its pace of acquisitions and new business launches.
At the meeting, Boneparth said, “Clearly, we create more long-term value by ownership of brands.”
He declared the company’s health “excellent” and its balance sheet “rock solid.” Lasting about six minutes, the meeting passed with a speed and smoothness that belied the dynamic year it brought to a close.
“This has been a year of very positive change,” said Boneparth in his report on the company’s progress.
In 2003, Jones dropped the contested Lauren by Ralph Lauren license and filed a $550 million breach-of-contract lawsuit against Polo Ralph Lauren Corp., which owns the name and had licensed it to Jones. The suit could go to trial next year.
For spring, Jones launched the Jones New York Signature line, which competes with the Lauren line now produced by Polo. Signature is on course to bring in sales of more than $200 million this year.
The vendor also expanded through the acquisition of Kasper A.S.L. last year, which brought the Anne Klein New York, AK Anne Klein, Kasper, Le Suit and Albert Nipon businesses on board, along with annual sales of about $375 million.
“The goal here is to create a bullet-proof company,” said Boneparth, noting that this would come by not being overly reliant on any one customer or channel of distribution.
Jones’ stable of businesses includes better and moderate wholesale apparel, footwear and retail. In 2003, the firm’s earnings dipped 1.1 percent to $328.6 million, or $2.48 a diluted share, after the exclusion of an accounting adjustment. Sales for the 12 months ended Dec. 31 rose 0.8 percent to $4.38 billion.
“It’s been a good year,” said Boneparth. “Our job is not to get complacent.”
The corporate machinery hasn’t slowed much, as Jones is now in the midst of a hostile bid for Maxwell Shoe Co. After the meeting, Boneparth noted, “Maxwell is certainly a company we would like to buy, but it’s not a company we have to buy.”
There are also product launches “in the test tube,” he said, declining to be specific.