Jones Apparel shares climb 44%
Shares of Jones Apparel Group Inc. soared 44 percent yesterday after the New York-based clothing and shoe maker cut back on its credit lines and gained borrowing flexibility to navigate through one of the toughest retail climates in decades.
Jones, the parent company of shoe designer Nine West Group in White Plains, said that its $750 million credit line maturing in May 2010 was trimmed to $600 million, reflecting its current business needs. In addition, Jones said that a $500 million credit line that matures in June was canceled.
The company said that the successful negotiations with lenders to adjust its existing credit agreements will give it greater flexibility to run its businesses “during these unprecedented economic times.”
Bloomberg News reported yesterday that the holiday shopping season may have been the worst in four decades after consumers spent 20 percent less on women’s clothing, electronics and jewelry during November and December. The weakness in consumer spending has put pressure of Jones and other apparel companies that supply traditional department stores and increased investor concerns about their debt levels.
The company’s brand names include Nine West, Jones New York, Kasper, Bandolino, Enzo Angiolini, Anne Klein and Gloria Vanderbilt.
“We are pleased with the overwhelming support of the financial institutions associated with the amendment process and believe it was prudent to pursue amendments now that allow financial flexibility in the current uncertain economic environment,” Chief Financial Officer John T. McClain said in a written statement.
Shares of Jones surged $1.73 to $5.62 in regular trading yesterday on the New York Stock Exchange.
The percentage gain of 44 percent was the largest daily gain in 17 years, according to Bloomberg. Even with the strong day, the shares remained far below the 52-week high of $22.12 on Sept. 9.