The Wall Street Journal-20080214-Earnings Digest- Loss-Plagued Jones Apparel To Sell l-e-i- Only at Wal-Mart
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Earnings Digest: Loss-Plagued Jones Apparel To Sell l.e.i. Only at Wal-Mart
Full Text (297 words)Jones Apparel Group Inc. will sell its moderately priced l.e.i. brand aimed at teenage girls exclusively in Wal-Mart stores, as part of a broader strategy by the beleaguered company to ink exclusive deals with big chains.
Jones Chief Executive Wes Card said in an interview that by selling only to Wal-Mart Stores Inc. -- instead of to several retailers, including Kohl's Corp., J.C. Penney Co. and Macy's Inc. -- the company will "dramatically increase" sales of the label, estimated at $98 million in 2007. At Wal-Mart, l.e.i. could generate sales of $100 million in the second half of 2008 alone, after the apparel line hits 3,000 stores this summer, he said.
Yesterday, Jones also said its fourth-quarter loss narrowed to $89.8 million. Excluding a gain from the sale of its upscale Barneys New York retail chain and other one-time items, earnings were nine cents a share, beating the mean estimate by analysts surveyed by Thomson Financial for seven cents a share.
The l.e.i. deal comes as retailers are cutting orders for midtier brands sold by multiple chains, pushing their own private labels and demanding exclusive brands from vendors in an attempt to differentiate themselves from competitors. Polo Ralph Lauren Corp.'s new American Living brand is now arriving at J.C. Penney stores. And Liz Claiborne Inc. announced last month that it would license its Dana Buchman brand to Kohl's.
Jones's higher-priced "better" sportswear brands, such as Anne Klein and Jones New York, will continue to be sold at multiple chains, Mr. Card said.
Yesterday, Jones said earnings from continuing operations in 2008 will likely be in the range of $1.25 to $1.50 a share, compared with last year's $1.26 a share.
Jones shares jumped $1.70, or 11%, to $17.15 in 4 p.m. New York Stock Exchange composite trading.