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Jones Apparel Group reports 2009 Q2 results
30 Jul '09
5 min read
Retail Improvement Strategy Update
The Company continues to execute on its previously-announced retail improvement plan to right-size the retail portfolio, with the goal of enhancing segment profitability and improving return on invested capital. The Company has been working constructively with its landlords and now plans to exit approximately 240 locations throughout 2009 and 2010, and will also continue to test and evaluate new concepts, such as ShoeWoo.
As of July 29, 2009, the Company remains on track with its plan and has exited 48 locations. The Company now anticipates expense savings and the elimination of unprofitable store locations to improve results by $4 million in 2009, $15 million in 2010 and $21 million in 2011. These actions will also reduce future capital expenditures relating to such locations.
The following notable events have recently occurred:
• signed an agreement with Kurt Geiger Ltd. to license and distribute the Nine West and Easy Spirit brands in the United Kingdom and Ireland beginning with the Spring 2010 product lines;
• increased the Company's ownership interest in international licensing partner GRI Group Limited to 25%;
• entered into a new $650 million senior secured three-year revolving credit facility; and
• completed the purchase of approximately 97% of the $250 million principal amount outstanding of 4.250% Senior Notes due November 2009.
Mr. Card concluded: "We are benefiting from the initiatives that we began last year to streamline our organization, optimize our distribution network and update our technology infrastructure. Furthermore, we continue to position the Company for the ultimate economic recovery and are taking the steps to strengthen and begin to increase sales of our core brands by offering well-designed products of good quality and at price-points that fit today's economy. We continue, however, to remain cautious in our outlook for the remainder of 2009."
The Company's Board of Directors has declared a regular quarterly cash dividend of $0.05 per share to all common stockholders of record as of August 14, 2009 for payment on August 28, 2009.
The Company continues to execute on its previously-announced retail improvement plan to right-size the retail portfolio, with the goal of enhancing segment profitability and improving return on invested capital. The Company has been working constructively with its landlords and now plans to exit approximately 240 locations throughout 2009 and 2010, and will also continue to test and evaluate new concepts, such as ShoeWoo.
As of July 29, 2009, the Company remains on track with its plan and has exited 48 locations. The Company now anticipates expense savings and the elimination of unprofitable store locations to improve results by $4 million in 2009, $15 million in 2010 and $21 million in 2011. These actions will also reduce future capital expenditures relating to such locations.
The following notable events have recently occurred:
• signed an agreement with Kurt Geiger Ltd. to license and distribute the Nine West and Easy Spirit brands in the United Kingdom and Ireland beginning with the Spring 2010 product lines;
• increased the Company's ownership interest in international licensing partner GRI Group Limited to 25%;
• entered into a new $650 million senior secured three-year revolving credit facility; and
• completed the purchase of approximately 97% of the $250 million principal amount outstanding of 4.250% Senior Notes due November 2009.
Mr. Card concluded: "We are benefiting from the initiatives that we began last year to streamline our organization, optimize our distribution network and update our technology infrastructure. Furthermore, we continue to position the Company for the ultimate economic recovery and are taking the steps to strengthen and begin to increase sales of our core brands by offering well-designed products of good quality and at price-points that fit today's economy. We continue, however, to remain cautious in our outlook for the remainder of 2009."
The Company's Board of Directors has declared a regular quarterly cash dividend of $0.05 per share to all common stockholders of record as of August 14, 2009 for payment on August 28, 2009.
Jones Apparel Group Inc
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