US: Jones Apparel puts $22.5m price on brands to be sold
The value of the brands that Jones Apparel hopes to sell by the end of this year is $22.5m according to a filing posted with the Securities and Exchange Commission today (14 August).
The company, which in May announced plans to exit or sell some of its moderate brands by the end of 2007, has not revealed which lines it intends to offload but says they will have revenues of around $300m this year, with "estimated combined operating margins in the low single digits."
In its Q10 filing, Jones Apparel said it had based the value of the brands on "preliminary sales negotiations." It added that the brands had a carrying value of $52.9m, so Jones has recorded a $30.4m impairment charge.
The company also confirmed earlier reports that the decision will not impact in any way its denim and junior division labels such as Gloria Vanderbilt, l.e.i., Energie, GLO, Jeanstar and Grane which are also part of its wholesale moderate apparel segment.
"We believe that exiting or selling these product lines will strengthen our future operating results and allow us to focus primarily on growth opportunities in our remaining wholesale product lines, which have strong fundamentals and operate at substantially higher margins," it said in the filing.
Jones Apparel's decision to divest unprofitable businesses and return to a business model dominated by wholesale brands and their affiliated retail operations is widely seen as a positive step. Among its other brands are Ann Klein, Easy Spirit, Nine West and Evan Picone.
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