The Jones Group Inc. said revenues for the fourth quarter of 2010 were $874 million, as compared with $777 million for the fourth quarter of 2009. The company reported adjusted earnings per share of 4 cents a share for
the fourth quarter of 2010, as compared with adjusted earnings per share
of 11 cents for the same period last year. 

As reported under generally accepted accounting principles (“GAAP”), the
company reported a fourth quarter loss per share of ($0.47) and ($1.53)
for 2010 and 2009, respectively. 

Revenues for the full year 2010 were $3,643 million, as compared with $3,327 million for the full year 2009.  The fourth quarter increase in revenues of 12.5% was as anticipated and reflective of increases in each business segment and the inclusion of the Stuart Weitzman business, which was acquired in June 2010.  

Adjusted earnings per share from continuing operations on a full year basis were $1.51 in 2010 as compared with $1.14 per share in the prior year.  The adjusted results exclude charges related to the impairments of certain intangible assets, the impact of severance and other costs related to restructuring activities, certain acquisition-related costs and other costs not considered relevant for period-over-period comparisons.    

On a full year basis, the company reported GAAP earnings of $0.62 per share for 2010 as compared with a loss of ($1.02) per share for 2009.  The results for both periods include non-cash impairment charges relating to certain trademarks and, in 2009, also for goodwill.  The non-cash impairment charges for 2010 of $38 million ($24 million after tax) were primarily related to our Wholesale Jeanswear business whereas the charges for 2009 of approximately $150 million ($138 million after tax) were related to our Retail, Wholesale Jeanswear and Wholesale Footwear and Accessories businesses.  Such charges in both periods were a result of the Company's required annual testing under GAAP.  

Wesley R. Card, The Jones Group chief executive officer, stated: “While the fourth quarter had its challenges, we had solid sales growth in our core brands and performed well against a challenging retail landscape.  Jones' portfolio is powerful, and we are consistently enhancing our brands' appeal and performance, as reflected in our topline results.  In addition, our newly acquired Stuart Weitzman business had strong results for the quarter and is very well positioned for further growth in 2011.  As we noted in our preliminary earnings announcement, margins for the fourth quarter were impacted by a more promotional environment than anticipated and a softer market for excess inventory, coupled with an anticipated rise in product costs.”

Cash provided by operating activities during 2010 was $141 million, compared with $349 million in 2009.  The current year results reflect higher earnings offset by an investment in working capital required to fund revenue growth and higher tax payments.  The Company had $200 million in cash and no amounts drawn under its $650 million of committed revolving credit facilities.

John T. McClain, The Jones Group chief financial officer, commented: “Our financial position remains strong.  We ended the year with $200 million in cash and our revolver undrawn.  As our business is growing, we have made an investment in working capital, and we will continue to carefully monitor that investment and maintain a prudent management of inventories and expenses throughout 2011 in order to conserve cash and improve margins.  We enter 2011 with a more conservative, tightened buy plan and are now well-positioned with our inventory.”  

The company noted that it closed 44 retail locations in the 2010 fourth quarter to end the year with 803 locations (which includes acquired Stuart Weitzman locations).  Consistent with its plan, the Company closed 194 locations in 2010.

The following notable events have recently occurred:

    * we entered into an exclusive licensing agreement to design, develop, produce and distribute Jessica Simpson Sportswear under the Jessica Simpson Collection;
    * we entered into an agreement with Mexico's Liverpool department store to exclusively carry Jones New York in Mexico beginning with the spring 2011 line;
    * we are introducing Jones New York in Spain's El Cortes Ingles department store in March 2011; and
    * we continued to add to our talent by appointing Sally Ross as Executive Vice President of Nine West Direct Merchandising.

Card concluded: “Looking at 2011, the economic indicators continue to point to a slow and gradual improvement, but there will be many challenges ahead including continued cost pressures and consumer reaction to higher prices.  We have the right elements in place to build the most powerful portfolio of brands in fashion and deliver value, exceptional talent, best-in class products, smart branding strategies and diversified distribution channels worldwide.  We are confident that our brands will achieve growth throughout 2011, and will support the bottom line through selective price increases, logistics enhancements and the maintenance of a lean operating structure.”