Jones Group Steps Up Focus on Luxury

Jones Group Steps Up Focus on
Richard Dickson and Wes Card

NEW YORK — Shoes are in the spotlight at The Jones Group Inc.

With strong contemporary footwear sales buoying the firm’s fiscal 2011 performance, CEO Wes Card now wants to focus on being more high-end and fashion-forward.

“In terms of the category, we’re expecting a very good footwear year this year,” said Card. Speaking to Footwear News last Wednesday he added, “One of our key pillars is to develop new and emerging brands and more upscale brands. [They will be] important additions to our core brands, which we’re also working very hard to reinvigorate.”

Card also shed light on the strategy for Stuart Weitzman’s new luxury line, SW1. Overall, the designer’s sales increased about 19 percent in the fourth quarter, with international wholesale composing nearly 42 percent of the business. The global strength encouraged the firm to focus on international doors such as Holt Renfrew and Selfridges for SW1.

“Our plan there is to really create a major luxury brand across categories. Stuart wanted to do a very high-end line sold in the best shops around the world [and] it appears he really hit a home run with the initial introduction,” said Card.

Richard Dickson, president of branded businesses, added, “[There’s also] lots more to come from B Brian Atwood as the business continues to have an exciting growth trajectory.”

Another standout footwear performer was Kurt Geiger, which increased group revenue by $100 million and improved overall margins by approximately 240 basis points. Dickson said, “They’ve bucked the European trend and really done a great job.”

2012 also will be a transformative year in retail for Jones, as it seeks to convert a number of high-overhead and underperforming Nine West doors. Some will become Stuart Weitzman stores and others Kurt Geiger stores, Dickson said.

There will be challenges, however. Card noted that retailers remain concerned about the back half and how promotional it will be. “That’s going to be the norm that we’re going to be operating in,” he said.

As for Europe, Card said, “It’s a tough one to call. Every day the news shifts. Fortunately, we’re heavily penetrated in London [and] we also have the advantage of running a concession business.”

Jones narrowed its fourth-quarter loss to $21.1 million, or 27 cents a share, from $40.1 million, or 47 cents, with sales coming in under management’s expectations due to heavy discounting in the period.

For the full year, Jones earned $50.7 million, or 61 cents, down slightly from $53.8 million, or 62 cents, in 2010. The cash balance stood at $238.8 million with debt of $854.7 million.

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