Jones Group to Close 170 Stores While Trimming Workforce
Jones Group Inc. (JNY), 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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