Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Jones Group Inc. (JNY), Macy’s, Inc. (M), Fifth & Pacific Companies Inc (FNP): This Apparel Company Has Two Ways to Reward Shareholders

Retailer and apparel-maker The Jones Group Inc. (NYSE:JNYis at a crossroads. The company has too many brands, which has left it with little growth and declining retail sales. Jones Group is currently exploring a possible sale of the entire company or the divestment of individual brands. Several upcoming events could power shares higher and make the stock a buy.

The Jones Group Inc. (NYSE:JNY)

Jones Group owns over 35 brands in six business segments. The segments include: designer, contemporary, better, bridge, moderate, and juniors. Popular brands from Jones Group include Nine West, Jones New York, and Anne Klein. At the end of 2012, Jones Group had 185 specialty retail stores and 409 outlet stores. Several of these under-performing locations are scheduled to be closed over the next two years.

New brand

Recently, The Jones Group Inc. (NYSE:JNY) announced the launch of its new QMack brand. The new clothing line, which will focus on millennial customers, will be sold exclusively at Macy’s, Inc. (NYSE:M) stores across the country. The line promises to allow customers to “mix and mack” tops and bottoms to create trendy outfits for the younger generation. Products will include blazers, mini-skirts, blouses, dresses, and cardigans.

Prices for the new line will range from $29 to $299, which represents a strong entry point that could appeal to a higher end millennial shopper. The company’s partnership with Macy’s, Inc. (NYSE:M) perfectly fits this price point and target customer. In fact, Macy’s turned to Jones Group to appeal to this demographic.

“When Macy’s approached us with the opportunity to create a new brand with a premiere placement on Macy’s, Inc. (NYSE:M) impulse floor, we saw this as an ideal occasion to combine our respective strengths and appeal to the millennial girl,” said Richard Dickson, president and CEO of Jones Group.

The brand has begun selling in 150 Macy’s, Inc. (NYSE:M) locations and online at, with more stores set to be added in the future. Jones Group will also feature the new brand in the September issue of Vogue magazine.

Sell brands

One option for The Jones Group Inc. (NYSE:JNY) to provide a boost to its stock price is to sell-off one or multiple brands. Jones Group owns over 35 brands, making it hard to focus on inventory and marketing for each individual business. This over-sized portfolio has also made it hard for the company to expand its international push.

In fiscal 2012, Nine West made up 24% of the company’s sales, while Jones New York made up 18% of last year’s sales. After that, the other brands make up small total percentages of sales and fail to differentiate themselves in importance. Nine West may be in for another strong year with a new fall lineup featuring 26 new pairs of shoes. The new lineup will be featured in the September issue of InStyle magazine.

Jones Group should keep its Nine West brand and work on selling-off other brands. Fifth & Pacific Companies Inc (NYSE:FNP made a similar move. The former owner of Liz Claiborne sold its namesake brand to J.C. Penney Company, Inc. (NYSE:JCP) in an attempt to focus on strong-growing brands. Fifth & Pacific Companies Inc (NYSE:FNP) is now left with Juicy Couture, Lucky Brand, Kate Spade, and Adelington Design.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.