Jones Apparel Group Completes Sale of Barneys New York and Enters Into Accelerated Share Repurchase Agreement
September 07 2007 - 8:30AM
PR Newswire (US)
NEW YORK, Sept. 7 /PRNewswire-FirstCall/ -- Jones Apparel Group,
Inc. (NYSE: JNY; the "Company" or "Jones") today announced that it
has completed the sale of its indirect wholly owned subsidiary
Barneys New York, Inc. ("Barneys") and has entered into an
accelerated share repurchase ("ASR") agreement with Goldman, Sachs
& Co. ("Goldman") to utilize a portion of the proceeds from the
sale. Jones received an aggregate of approximately $945 million in
cash at closing from the sale of Barneys to an affiliate of
Istithmar PJSC, a Dubai based private equity and alternative
investment house. The purchase price is subject to certain
post-closing adjustments. Jones expects to realize estimated
after-tax proceeds, net of transaction expenses, of approximately
$840 million from the sale. The proceeds of the sale will be used
to fund the ASR program, to repay short term borrowings and for
other corporate purposes. Under the ASR agreement, Jones will
repurchase $400 million of its outstanding common stock, with
approximately 15.5 million shares to be received by September 12,
2007 and the remaining shares to be received at the end of an
initial valuation period and upon final settlement of the ASR
program. Final settlement of the ASR program is scheduled for no
later than July 19, 2008, and may occur earlier at the option of
Goldman or later under certain circumstances. The initial shares
repurchased by Jones are subject to adjustment if Jones were to
enter into or announce certain types of transactions. Wesley R.
Card, President and Chief Executive Officer, stated, "The
repurchase of our stock is a compelling investment opportunity and
reflects the Board's confidence in the future of Jones. We received
substantial value for our investment in Barneys, and we are pleased
to return that value to our shareholders through this ASR program.
On behalf of Jones Apparel Group, its Directors, employees and
shareholders, I want to thank Howard Socol, his management team and
associates at Barneys for their hard work and dedication as part of
Jones. We wish them the best of luck in the future." John T.
McClain, Chief Financial Officer, added, "We believe that the ASR
program is an effective way to execute a meaningful repurchase in a
single transaction. This use of the net proceeds from the Barneys
transaction will enhance present shareholder value, while at the
same time adding greater strength to our balance sheet and
providing the Company with the financial flexibility to
strategically invest in growing our brands for the future benefit
of our shareholders." The final number of shares Jones is
repurchasing under the terms of the ASR agreement and the timing of
the final settlement will depend on prevailing market conditions
and the volume weighted average price per share of Jones common
stock over the term of the ASR program, within a maximum and
minimum established during an initial valuation period and subject
to adjustment if Jones were to enter into or announce certain types
of transactions. Goldman is expected to purchase Jones common stock
in the open market in connection with the ASR program. As of
September 5, 2007, before giving effect to the ASR transaction,
Jones had 103.9 million shares of its common stock outstanding.
Jones has repurchased nearly 5.1 million shares of its common stock
for approximately $95 million under the Company's current
repurchase authorization, and approximately $205 million remains
available for stock repurchases under this authorization, passed by
the Board of Directors in February 2007. The Board of Directors has
authorized an additional $500 million of share repurchases, in
order to facilitate the ASR program and other possible future
repurchases. The Company will have approximately $305 million of
stock repurchase authority after giving effect to the repurchases
under the ASR program, assuming no adjustments to the initial
shares repurchased by Jones become necessary. During the term of
the ASR program and for approximately two weeks after final
settlement, Jones may only make repurchases of its common stock
with the consent of Goldman. J.P. Morgan and Citibank, N.A. are
acting as advisors to Jones in connection with the ASR program.
About Jones Apparel Group, Inc. Jones Apparel Group, Inc.
(http://www.jny.com/), a Fortune 500 company, is a leading
designer, marketer and wholesaler of branded apparel, footwear and
accessories. The Company also markets directly to consumers through
its chain of specialty retail and value-based stores. The Company's
nationally recognized brands include Jones New York, Nine West,
Anne Klein, Gloria Vanderbilt, Kasper, Bandolino, Easy Spirit,
Evan-Picone, l.e.i., Energie, Enzo Angiolini, Joan & David,
Mootsies Tootsies, Sam & Libby, Napier, Judith Jack, Albert
Nipon and Le Suit. The Company also markets costume jewelry under
the Givenchy brand licensed from Givenchy Corporation and footwear
under the Dockers Women brand licensed from Levi Strauss & Co.
Each brand is differentiated by its own distinctive styling,
pricing strategy, distribution channel and target consumer. The
Company contracts for the manufacture of its products through a
worldwide network of quality manufacturers. The Company has
capitalized on its nationally known brand names by entering into
various licenses for several of its trademarks, including Jones New
York, Evan-Picone, Anne Klein New York, Nine West, Gloria
Vanderbilt and l.e.i., with select manufacturers of women's and
men's products which the Company does not manufacture. For more
than 30 years, the Company has built a reputation for excellence in
product quality and value, and in operational execution. Forward
Looking Statements Certain statements contained herein are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements regarding
the Company's expected financial position, business and financing
plans are forward-looking statements. The words "believes,"
"expect," "plans," "intends," "anticipates" and similar expressions
identify forward-looking statements. Forward-looking statements
also include representations of the Company's expectations or
beliefs concerning future events that involve risks and
uncertainties, including: -- the impact of changes in the market
value of the Company's common stock on the final number and price
of shares repurchased under the accelerated share repurchase
agreement; -- the Company's ability to effectively deploy the
proceeds received by it from the sale of Barneys, and the timing of
the use of those proceeds; -- those associated with the effect of
national and regional economic conditions; -- lowered levels of
consumer spending resulting from a general economic downturn or
lower levels of consumer confidence; -- the performance of the
Company's products within the prevailing retail environment; --
customer acceptance of both new designs and newly-introduced
product lines; -- the Company's reliance on a few department store
groups for large portions of the Company's business; --
consolidation of the Company's retail customers; -- financial
difficulties encountered by customers; -- the effects of vigorous
competition in the markets in which the Company operates; -- the
Company's ability to attract and retain qualified executives and
other key personnel; -- the Company's reliance on independent
foreign manufacturers; -- changes in the costs of raw materials,
labor, advertising and transportation; -- the general inability to
obtain higher wholesale prices for the Company's products that the
Company has experienced for many years; -- the uncertainties of
sourcing associated with the new environment in which general quota
has expired on apparel products (while China has agreed to
safeguard quota on certain classes of apparel products through
2008, political pressure will likely continue for restraint on
importation of apparel); -- the Company's ability to successfully
implement new operational and financial computer systems; and --
the Company's ability to secure and protect trademarks and other
intellectual property rights. A further description of these risks
and uncertainties and other important factors that could cause
actual results to differ materially from the Company's expectations
can be found in the Company's Quarterly Report on Form 10-Q for the
quarter ended July 7, 2007, including, but not limited to, the
Statement Regarding Forward-Looking Disclosure and Item 1A-Risk
Factors therein, and in the Company's other filings with the
Securities and Exchange Commission. Although the Company believes
that the expectations reflected in such forward-looking statements
are reasonable, such expectations may prove to be incorrect. The
Company does not undertake to publicly update or revise its
forward-looking statements as a result of new information, future
events or otherwise. DATASOURCE: Jones Apparel Group, Inc. CONTACT:
Joele Frank, or Sharon Stern, both of Joele Frank, Wilkinson
Brimmer Katcher, +1-212-355-4449, for Jones Apparel Group, Inc. Web
site: http://www.jny.com/
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