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Jones Apparel to buy shoe brand Stuart Weitzman
May '10
Jones Apparel Group Inc. announced that it has entered into an agreement to acquire Stuart Weitzman Holdings, LLC, a privately-held leading designer and manufacturer of women's salon footwear and accessories. Stuart Weitzman, LLC markets its products in fine specialty and department stores worldwide and in its own chain of retail stores in the U.S. and abroad. Stuart Weitzman, LLC realized net revenues of approximately $193 million for the year ended January 2, 2010.

Under the terms of the agreement, Jones will make initial cash payments of approximately $180 million to selling shareholders, including Irving Place Capital, for a 55% interest in Stuart Weitzman, LLC. Stuart Weitzman will be the principal owner of the remaining 45% interest. The selling shareholders will receive cash payments for their remaining interest at the end of 2012, based upon the value of Stuart Weitzman, LLC at that time in accordance with a contractually pre-determined formula.

Over the last five years, Stuart Weitzman, LLC has experienced significant growth, including adding 20 full-priced stores and opening its first five outlet stores domestically. During the same time period outside the U.S., Stuart Weitzman, LLC opened its first seven stores, including flagship stores in Rome and Milan, while further expanding its global footprint with the opening of 19 incremental licensed stores. Stuart Weitzman will continue as Executive Chairman of Stuart Weitzman, LLC and together with Wayne Kulkin, President of Stuart Weitzman, LLC, and their management team, remains fully committed to the growth of the business.

Jones will finance the transaction with cash on hand or other alternative financing. The acquisition is expected to be accretive to earnings per share, exclusive of any required purchase accounting adjustments, and is anticipated to close within 30 business days, subject to customary closing conditions, including expiration of the Hart-Scott-Rodino Antitrust waiting period.

Wesley Card, Chief Executive Officer, Jones Apparel Group, said, "The Stuart Weitzman business represents an excellent addition to our existing portfolio of branded footwear and accessories and is an ideal complement to our designer and contemporary businesses."

Mr. Card added: "With a world renowned business and notable brand recognition, Stuart Weitzman's shoes and handbags reach a loyal customer base that spans across generations. Our goal of providing strong brands and quality products to a wide range of consumers is furthered by having Stuart Weitzman, LLC join our company. Together, with our expertise in execution and sourcing, Stuart Weitzman, LLC will continue to expand its reach as a leader in the upscale footwear market. We welcome Stuart, Wayne and their entire team to Jones."

Stuart Weitzman said: "Irving Place Capital has been a great partner, helping us to build Stuart Weitzman into a successful, compelling, global brand.Together, we determined that the time was right to take the company to the next level by teaming up with Jones. Jones has the resources to scale the business to maximize future growth and a rich history of understanding and supporting the entrepreneurial nature of its various businesses. I am extremely confident that, because of its appreciation of our brand vision, we have found a strategic partner to help us maximize our growth opportunities. We look forward to collaborating with Jones and leveraging its strong infrastructure to help us improve our service and expand our product mix to an even broader consumer base worldwide."

"Our relationship with Stuart Weitzman has been a successful and fulfilling partnership," said Rick Perkal, Senior Managing Director, Irving Place Capital. "Stuart Weitzman, LLC is well positioned for continued success and growth as part of Jones."

The financial adviser to Jones was Goldman, Sachs & Co. The financial adviser to Stuart Weitzman, LLC was Financo, Inc.

Jones Apparel Group Inc

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