Tattered Jones Apparel is finally fitting well with investors, having just sewn up aggressive new deals with Wal-Mart and Macy’s and reported a loss that was narrower than expected.
Jones, which late last year sold its Barneys New York luxury department store chain to Dubai-based private equity firm Istithmar, has seen the price of its stock plummet by more than 50 percent over the past year.
But its shares shot up 11 percent, or $1.70, to close at $17.15 after the company – which manufactures department-store staples like Gloria Vanderbilt, Anne Klein and Nine West – said yesterday that it will begin distributing its l.e.i. jeans brand for young and teenage girls at 3,000 Wal-Mart stores this summer.
Jones also said it has struck an agreement to design jeans for two Macy’s private brands, Style & Co. and Charter Club.
Those moves came as Jones yesterday narrowed its fourth-quarter loss, and posted operating profits that beat Wall Street’s expectations as cost-cutting offset steeper-than-expected markdowns amid a disappointing holiday season.
The Macy’s and Wal-Mart deals are unorthodox moves for Jones, which built its empire by dominating the sales floors of department stores with its own stable of middle-market clothing brands.
But as big chains like Macy’s have closed stores and expanded their own competing private labels, apparel companies like Jones are being forced to find new ways to grow.
Jones’ Wal-Mart business “could easily be a billion-dollar group in the next couple of years,” Jones CEO Wes Card told The Post.
Still, the core strategy for Jones “is get the engines running in our department-store business,” Card said.
A key stumbling block has been its catering to baby-boomer women, who are typically drawn to trendy, sexy styles, but can’t always fit into the clothes.
The Jones New York label is an example of a baby-boomer line that “needed to be modernized,” Card admits. He promises styles this year that will be “more updated.”
Jones’ renewed push in this segment is a big contrast to archrival Liz Claiborne.
As reported by The Post, Liz this week is expected to sell its Ellen Tracy brand for $50 million to a consortium of private investors.
Last month, Liz licensed the Dana Buchman brand exclusively to Kohl’s, which is well downmarket from the Nordstrom and Saks stores that had carried Dana Buchman in the past.
Liz said last summer it was looking to get rid of 16 wholesale brands that accounted for $800 million in revenue partly because they’re less profitable than a handful of fast-growing labels it has decided to keep. Those include Kate Spade, Juicy Couture and Lucky Brand Jeans.
“In comparison to (Liz Claiborne), our strategy is clear – 80 percent of our business is department-store based,” Card added. “That’s important and we’re not going to walk away from it.”