Jones Builds on Footwear Success

Jones Builds on Footwear Success
Inside Kurt Geiger’s first New York store

With footwear now representing more than half of its total sales, The Jones Group Inc. is continuing to capitalize on the strength of the category.

Men’s shoes, in particular, could be a new and significant growth opportunity at the firm, its execs said.

Jones CEO Wesley Card told Footwear News last Wednesday: “[Footwear] is the growth vehicle … both domestically and internationally, [unlike] American sportswear and other categories that don’t translate with the same ease internationally. We’re positive about the business, and we have good momentum with our brands as we enter 2013.”

Richard Dickson, president and CEO of branded businesses at Jones, called out footwear brands Nine West, Rachel Roy, Stuart Weitzman and Brian Atwood as standout performers in the quarter. And Kurt Geiger, which opened its third U.S. store earlier this month in New York, is also a growth driver, he added.

“We’re very excited about the U.S. expansion for Kurt Geiger, and we’re working to solidify the wholesale business here,” said Dickson, adding that the firm is searching for suitable retail locations in Miami, Chicago and Dallas.

“We’ve had a really great percentage of our Geiger business come from the men’s piece,” he told FN. “We’re getting early reads that there’s a big opportunity for us to have a strong men’s business there. And within the group’s footwear portfolio, that would be a new and exciting piece of our business.”

Nine West will be a key component of the company’s evolving digital strategy for 2013, as the brand’s online store will be revamped to drive e-commerce sales.

For the fourth quarter ended Dec. 31, Jones improved its operating performance, earning an adjusted 14 cents a share, besting analysts’ estimates by 5 cents. However, net losses attributable to Jones widened to $80.3 million, or $1.06 a diluted share, from $21.1 million, or 27 cents, a year earlier.

Revenues for the three months rose 8.8 percent to $971.9 million, from $893.6 million.

Domestic wholesale footwear and accessories and denim were Jones’ best performers, while its structured sportswear business and retail channels remained more challenging and promotional, the firm said.

For the full year, Jones’ net losses totaled $56.1 million, or 72 cents a share, compared with a net income of $50.7 million, or 61 cents, in 2011. Revenues inched up 0.3 percent to $3.8 billion from $3.79 billion.

Jones ended the year with $149.6 million in cash and $955.7 million in debt, and executives said it is approaching its 2013 inventory commitments with conservatism, consistent with 2012.

Card noted, “I’m cautious just because of the political and economic environment. It’s unclear how that’s going to play out for the year. I’m hopeful we continue to register steady improvement because the consumer has been very resilient, and we’re hopeful about that.”