April 24 (Bloomberg) -- Jones Group Inc., the owner of the Jones New York, Nine West and Anne Klein fashion brands, will close 170 stores and cut 8 percent of its workforce after first-quarter profit trailed analysts’ estimates.
The actions will generate about $40 million in annual pretax savings by mid-2014, New York-based Jones Group said today in a statement. The plan will result in costs of $40 million to $60 million in the next 15 months, the company said.
Chief Executive Officer Wesley Card has been trying to turn around Jones Group by focusing on higher-priced women’s apparel brands like Rachel Roy and Stuart Weitzman shoes while at the same time trying to revive the Jones New York and Anne Klein department-store sportswear brands. The company is unveiling a new Jones New York sportswear line in the fall.
Jones Group also reported preliminary first-quarter adjusted profit of 15 cents a share on sales of about $1 billion. Analysts estimated profit of 25 cents on revenue of $997.3 million. The company will issue its quarterly report on May 1.
Jones Group forecast revenue of as much as $3.95 billion this year. Analysts projected $3.97 billion.
About 850 jobs are being cut, said Sharon Stern, a Jones Group spokeswoman who works for Joele Frank, Wilkinson Brimmer Katcher. Jones Group operated 594 stores as of Dec. 31.
Jones Group climbed 2.7 percent to $13.97 at the close in New York. The shares have advanced 26 percent this year, compared with a 10 percent increase for the Russell 2000 Index.
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