US: Jones posts quarterly loss of US$47.1m
The loss was attributed to discontinued operations, the impact of severance and other expenses related to restructuring activities and its strategic review of operations. There was also a downturn in sales, as Jones reported revenues for the second quarter down to $904m versus revenues of $924m for the corresponding period last year.
The US retail group, which posted a net income of $36.6m this time last year, said that the $900m offer it has received for Barneys from Japan's Fast Retailing last month did indeed constitute a superior transaction to the $825m bid tabled by Dubai-based Istithmar.
Jones has transmitted to affiliates of Istithmar a written notice containing the material terms of the Fast offer and expressing the company's intention to accept the Fast offer. Istithmar now has two business days to top the Fast offer before Jones is entitled to terminated the offer, which would cost Jones a termination fee of $22.7m.
Wesley R Card, president and CEO of Jones, said: "Several of our businesses, including brands in our Denim, Sportswear, Better Apparel and Wholesale Footwear and Accessories businesses performed well during the quarter, as expected, reflecting the strength of our core Jones New York, Nine West and Anne Klein brands. The negative sales trend, however, in the overall retail environment in the second quarter heavily impacted our results.
"Further affecting results were our company-owned retail stores, which continued to trend negatively throughout the second quarter as comparable store sales were down 8.0% for the period, with heavy promotional selling to clear excess inventory. Our wholesale businesses, although overall positive performers, were also impacted by the softening retail atmosphere and required us to provide higher than planned markdown support to our retail partners in the quarter."
The company is now targeting 2007 full year adjusted earnings per share to be in a range of $1.28 to $1.34, compared to 2006 adjusted earnings per share of $2.19.
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