Reuters: Global Markets: Jones Group slashes retail stores, shares rise

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Jones Group slashes retail stores, shares rise Apr 24th 2013, 14:14 Wed Apr 24, 2013 10:14am EDT (Reuters) - Jones Group Inc (JNY.N), the fashion company that owns retail chains Nine West and Jones New York, said it will close about 170 underperforming U.S. stores by mid-2014 and cut its workforce by about 8 percent in a bid to revive profits. Shares of the company rose 2 percent to $13.88 in early trading on the New York Stock Exchange after it announced the cuts, which it said would cost it about $40 million to $60 million over the next 15 months. Jones' U.S. stores have struggled for some time in the face of aggressive competition. Sales during the all-important holiday season fell about 7 percent. The company estimated first-quarter adjusted earnings of about 15 cents per share on revenue of about $1 billion. This falls short of Wall Street's expectation of a 25-cent profit. First-quarter gross margins are estimated to fall 90 basis points below the company's own forecasts as a highly promotional environment and an unusually cold weather hurt sales. Jones said on Wednesday U.S. retail staff will be cut by about 18 percent and corporate, support and supply chain staff by about 2 percent. The company said upon completion of the restructuring plan, it expects outlet stores comprising a significantly higher percentage of its overall retail locations. The company is now betting on its wholesale division, where sales to chains like Macy's Inc (M.N) and Nordstrom Inc (JWN.N) contribute about half its revenue. Jones said it will streamline the wholesale business to focus more on sportswear and also consolidate some distribution and supply chain facilities. The restructuring is already underway and includes 50 store closures announced in the fourth quarter of 2012, Jones said. Jones had a total of 594 domestic retail stores at the end of 2012, which include 409 outlet stores. The company had about 6,250 full-time employees and about 5,540 part-time employees as of December 31, according to a regulatory filing. (Reporting by Siddharth Cavale in Bangalore; Editing by Rodney Joyce, Supriya Kurane) Link this Share this Digg this Email Reprints

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