NEW YORK (April 29, 2009)—After experiencing a negative quarter in which revenues fell 8.6 percent, Jones Apparel Group, Inc. (JNY) decided close more than 200 of its stores between this year and next. Revenues dropped from $975 million for the first quarter of 2008 to $891 million. This decrease reflected the overall economic conditions that are affecting retail sales. All of the company’s segments felt the impact, except wholesale jeanswear, which experienced a 3.4 percent improvement in revenues over the prior year.

Nine West's Prom Perfect sandal

“Given the overall economic environment, we were satisfied with our first quarter results, which reflect the actions we have taken to control expenses and manage our capital,” says president and CEO Wesley R. Card. “Our wholesale jeanswear segment performed well; however, our other wholesale businesses were impacted by reduced orders and higher markdown support in the continuing promotional environment. Our own chain of retail stores was impacted by the slowing retail sales trend and promotional environment and registered a 10.6 percent decrease in comparable store sales during the quarter.”

In response to the economic downturn, the company examined its operated retail store strategy and decided to formulate a plan that will improve both profitability and return on invested capital. Under the new proposal, Jones Apparel Group will shutter the doors of 225 stores in 2009 and 2010. It will also continue to test and evaluate new concepts, such as ShoeWoo. The company expects these closures and savings will improve results by $3 million in 2009, $14 million in 2010 and $20 million in 2011.

“While overall results are still reflective of low consumer confidence and spending levels, we believe that there is enhanced value to be realized in our businesses through continued prudent cost management and creative marketing and branding,” Card says. “The time is also right to implement our comprehensive strategy to return our retail segment to profitability, as we have many leases expiring in the next two years.”

During the first quarter, the company announced the launch of Rachel Rachel Roy, a contemporary line that will include sportswear, footwear and accessories, and is scheduled to debut in August. The company also began selling New Balance for Nine West at select Nine West and New Balance stores, launched an e-commerce site for the Anne Klein brand and introduced Nine Loves, a Nine West rewards program.

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