Almost four months after Jones Apparel Group took itself off the auction block, aborting an unsuccessful sales attempt, analysts are framing a lot of sentences with “If Peter Boneparth can X, then his job will be secure.”
But Jones’ president and chief executive officer said he isn’t worried and that he is looking forward to a year of “investing in our major brands.”
Nine West tops that list. The division has new leadership: Fred Allard, who has been with the brand for 12 years, recently took over as its first creative director; on Tuesday, it was announced that Tobi Snyder, the former vice president of accessories and jewelry at New York & Co., was Nine West’s first senior vice president of merchandising. The Nine West Web site is being relaunched by the end of 2007, a quarter of the brand’s stores will have a new face and more units will open. And, 9×9 by Nine West denim is being introduced exclusively at Macy’s, which analysts see as an opportunity for the brand to regain some of its former vibrancy.
Here are some of the other blanks analysts are hoping to see filled in at Jones in the first half of next year:
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- Cost savings. “If Peter can execute on this $100 million price savings in 2007, people will forget some of the former volatility,” said Elizabeth Montgomery, analyst for Cowen & Co. “His legacy there depends on whether he can execute the cost savings. But it’s a big jump from $30 million in 2006 to $100 million in 2007.”
- Moderate and better brands. “If their better brands continue to perform and L.E.I. gets profitable, I think his job is pretty secure at this point. If not, then no,” said Brad A. Stephens, an analyst at Morgan Keegan & Co. Inc. “The big issue there is the moderate channel. L.E.I. has had a lot of problems in last few years, but they’ve eased fears for performance lately, and they need to keep that momentum going and have the retailers believing again.”
- Acquisitions. “There’s no reason Jones couldn’t acquire other retail opportunity,” said Andrew Jassin, managing director of the Jassin O’Rourke Group. “Jones ought to be acquiring other brands to leverage its financial and sourcing side. The question is, how will Jones corporation drive shareholder value? I would choose acquisitions over organic growth every day.”
- Barneys New York. “If Barneys is very successful, people will feel better about Peter’s track record of acquisitions,” said Margaret Mager, retail analyst and managing director for Goldman Sachs & Co. “If there are good opportunities, they should make acquisitions like they have been. For Jones, it’s all going to be about the unfolding and success or lack thereof at Macy’s and how Jones will do in developing business outside that channel of distribution. Experience is the best teacher, and Peter has now had a lot of different experiences.”