Shoes Shine for Jones

Shoes Shine for Jones
Wesley Card

Stuart Weitzman is giving Jones Apparel Group Inc.’s already-healthy footwear business an extra boost.

The firm’s wholesale footwear and accessories segment saw revenues surge 35 percent to $264.5 million in the second quarter, due in part to the Weitzman acquisition. As reported, Jones snapped up a 55 percent stake in the designer business in May for $180 million, and the brand is forecasted to generate sales of $219 million on a fully annualized basis.

Outside of Weitzman, Nine West, Anne Klein and Enzo Angiolini all delivered impressive results during the period, the company said in a conference call last Wednesday.

“Footwear at Jones has done incredibly well,” said Jennifer Black, president of consulting firm Jennifer Black & Associates.

Richard Dickson, president and CEO of Jones’ branded businesses, said on the call that Nine West, the firm’s biggest shoe brand, is experiencing double-digit increases over last year. The exec noted that the brand recently entered Nordstrom to positive early results.

The company did acknowledge that, like the rest of the industry, it is facing sourcing challenges — and that in some cases that would translate to slightly higher prices.

“We’re going to be opening up some mid-price points,” said CEO Wesley Card. “Moving from $69 to $79 might not be realistic, but in some cases, we’ll have to go to $74.50.”

Moving forward, Card said, Jones would continue to look for new acquisitions, particularly in the contemporary and affordable luxury spaces, but he stressed they would have to be the right fit for the firm.

“I don’t want everybody to think we’re on a mad acquisition spree here,” the CEO said. “We’re going to be very careful and selective and cautious in how we move forward, but there are opportunities and we’ll continue to pursue them as they arise.”

For the quarter ended July 3, income at Jones was $25.7 million, or 30 cents a diluted share, up from $13.1 million, or 15 cents, a year ago. Excluding the impact of acquisition-related charges and severance connected with the planned closure of certain stores, adjusted earnings per share was 45 cents for the quarter, compared with 29 cents in 2009.

Total revenues rose 6.9 percent to $859.6 million, from $803.9 million. Revenues included a sales gain of 7 percent to $849 million, from $793.4 million. The balance of revenues was from licensing income. Jones said it now expects full-year revenues for 2010 to increase between 8 percent and 11 percent from 2009, which would be the firm’s first annual revenue increase since 2005, according to Card.

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