The Jones Group Inc. (ticker: JNY, exchange: New York Stock Exchange (.N))
News Release -
Jones Apparel Group Receives Unsolicited Proposal from Fast Retailing Regarding Possible Acquisition of Barneys New YorkNEW YORK, July 5, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Jones Apparel Group, Inc.
(NYSE: JNY; the "Company" and "Jones") today announced that it has received an
unsolicited non-binding proposal from Fast Retailing Co., Ltd. ("Fast"), a
Japan based company, to acquire the Company's wholly owned subsidiary Barneys
New York, Inc. ("Barneys") for $900 million in cash. The proposal is subject
to due diligence and other conditions.
The Company's Board of Directors has made the requisite determination
under the Company's stock purchase agreement with affiliates of Istithmar (the
"Istithmar Agreement") that will enable Jones to provide information to Fast
and enter into discussions with Fast regarding its proposal. In the event
that Jones were to terminate the Istithmar Agreement to enter into an
agreement with Fast, it would be required to pay to an affiliate of Istithmar
a termination fee of $20.6 million (or $22.7 million if Jones terminates the
Istithmar Agreement after July 22, 2007).
The agreement with Istithmar has not been terminated and remains in full
force and effect.
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 our chain
of specialty retail and value-based stores, and operates the Barneys New York
chain of luxury stores. The Company's nationally recognized brands include
Jones New York, Evan-Picone, Norton McNaughton, Gloria Vanderbilt, Erika,
l.e.i., Energie, Nine West, Easy Spirit, Enzo Angiolini, Bandolino, Joan &
David, Mootsies Tootsies, Sam & Libby, Napier, Judith Jack, Kasper, Anne
Klein, Albert Nipon, Le Suit and Barneys New York. 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 primarily 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
About Barneys New York, Inc.
Barneys New York, Inc. (http://www.barneys.com), a wholly owned subsidiary
of Jones Apparel Group, Inc., is a luxury retailer with flagship stores in New
York City, Beverly Hills, Chicago, Boston and Dallas. Barneys also operates
two regional full-price stores, fourteen CO-OP Barneys New York stores,
thirteen outlet stores and two semi-annual warehouse sale events.
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 failure to reach an agreement and consummate a transaction with
Fast on the terms described in its proposal;
-- the outcome of any legal or regulatory proceeding that may be
instituted against the Company and others following announcement of a
transaction for the divestiture of Barneys;
-- the failure to obtain the necessary financing arrangements to
consummate a divestiture of Barneys;
-- the occurrence of any event, change or other circumstances that could
give rise to the termination of the Istithmar Agreement;
-- the failure of either party to meet the closing conditions set forth in
the Istithmar Agreement;
-- risks that the proposed divestiture of Barneys disrupts current plans
and operations and the potential difficulties in employee retention as
a result of the divestiture of Barneys;
-- the amount of costs, fees, expenses and charges related to the
divestiture of Barneys;
-- non-expiration of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976;
-- those associated with the effect of national and regional economic
-- 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
-- customer acceptance of both new designs and newly-introduced product
-- 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
-- the Company's ability to identify acquisition candidates and, in an
increasingly competitive environment for such acquisitions, acquire
such businesses on reasonable financial and other terms;
-- the integration of the organizations and operations of any acquired
businesses into the Company's existing organization and operations;
-- the Company's reliance on independent foreign manufacturers;
-- changes in the costs of raw materials, labor and advertising;
-- 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 Annual Report on Form 10-
K for the fiscal year ended December 31, 2006, 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
SOURCE Jones Apparel Group, Inc.
Wesley R. Card,
Chief Operating and Financial Officer of Jones Apparel Group, Inc.,
Joele Frank or Sharon Stern,
both of Joele Frank,
Wilkinson Brimmer Katcher, for Jones Apparel Group, Inc.