Clothing giant Jones Apparel Group Inc on Tuesday posted a 28 per cent fall in third quarter profit from last year as it was hurt by exit costs related to the Lauren licensed product line.

The Pennsylvania-based firm, whose brands include Jones New York and Nine West, reported net earnings for the 13 weeks ended October 4 of $93.9 million, or 71 cents per share, versus $129.8m, or 95 cents per share, last year.

Jones said in a news release those earnings were better-than-expected as its bottom line was hit by $28m in incremental expenses related to its exit from the Lauren line.

The company, which is still embroiled in a legal dispute with Polo Ralph Lauren Corp over the issue, added sales for the latest quarter slipped to $1.18 billion from $1.28bn in the same period of 2002.

It now sees full year earnings of $2.45 to $2.50 a share on revenue of around $4.3bn, with fiscal 2004 earnings seen in the range of $2.25 to $ 2.50 a share on revenue of about $4bn.

Jones, which also owns the Gloria Vanderbilt label and is due to complete its purchase of Kasper ASL Ltd - owner of the Anne Klein line - later this year, said its fiscal 2004 outlook excludes contributions from Kasper.

CEO Peter Boneparth said: "Throughout most of the third quarter, we noticed continued caution by consumers, apparently due to the lacklustre employment situation and its impact on the overall economy.

"In the final weeks of the period, however, we experienced a stronger level of consumer spending in our own retail operation, as well as in the comparable store sales trends reported by many of our retail customers."

He added: "We have rationalised our overhead and performed a review of our existing product lines within the better apparel segment of our business, given the transitions in the business for the introduction of Jones New York Signature, the exit from the Lauren and Ralph businesses and the pending acquisition of Kasper.

"During this process, we elected to close the Rena Rowan division effective for Fall 2004. The closure of this division will result in a $4.4m writedown of the trademark portfolio value during the fourth quarter which is reflected in our guidance for 2003.

"We anticipate that the inclusion of the Kasper businesses for the short period at the end of 2003 may be slightly dilutive as a result of the purchase accounting adjustments that will be recorded as of the closing date," he concluded.