The Jones Group (NYSE:JNY), which owns Nine West, Jones New York, Anne Klein, Gloria Vanderbilt, Joan & David and other strong apparel brands, has decided to sharply increase the number of stores it's closing. The chain, which had about 594 stores as of December, will now close 170 stores by this summer. Late last year, the store closing target was less than one third of that, at 50.
Along with those fewer stores will be fewer people. The chain detailed that it will slash its domestic retail staff by 18 percent, in addition to a much smaller (2 percent) cut in corporate, support and supply chain people. "Retail staff reductions and termination notifications began this month and will continue through the first half of 2014," said a Jones statement issued Wednesday (April 24).
Jones was explicit that these moves were "designed to improve profitability" and that it came after activist hedge fund Barington Capital Group was pressuring Jones Group to sell parts of its portfolio, according to a story in The Wall Street Journal, which said the actual number of laid-off employees will be about 850.
"These actions are expected to generate approximately $40 million in annualized pre-tax savings and reduction of operating losses by mid-2014, with the benefit to fiscal 2013 expected to total approximately $11 million," said the Jones statement.
In the midst of these cutbacks was a Jones move to strength online operations. Jones hired Milton Pappas away from Toys R Us to serve as president of e-commerce. Jones, whose LinkedIn page has him working for Toys R Us as VP of e-commerce from December 2011 right through April 2013, started this week, according to Internet Retailer.
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