The Jones Group Inc.
The Jones Group Inc. is a Fortune 500 company, headquartered in New York, which deals in design and wholesale of clothing, jeans wear, footwear, handbags and jewelry. The JNY business and operations fall into “six reportable segments”, which are defined in terms of “purposes of allocating resources and assessing performance”. The company generates its income from “domestic wholesale sportswear, domestic wholesale jeanswear, domestic wholesale footwear and accessories, domestic retail, international wholesale and international retail.”
The global designer owes over 35 brands. Among them are various brands owned by the retailer as well as licensed ones: Jones New York, Nine West, Kurt Geiger, Anne Klein, Rachel Roy (L), Robbi & Nikki, Robert Rodriguez, Boutique 9, Brian Atwood (L), Stuart Weitzman, Carvela, l.e.i., Easy Spirit, Gloria Vanderbilt, Joan & David, Enzo Angiolini, Bandolino, Nine & Co., Kasper, GLO, Miss KG, Le Suit, Evan-Picone, Energie, Erika, Mootsies Tootsies, Napier, Grane, Jessica Simpson (L), Judith Jack, Rafe (L), Givenchy (L), Pappagallo, and Albert Nipon..
Unlike its competitors, Jones does not rush after fashion tendencies, but pays more attention to daily lifestyle of their customers. The designer teams work closely with retail coordinators, who interact with customers on a day-to-day basis. Customer’s feedback is conveyed and implemented in drawings in order to reflect a genuine concept and come up with better solutions for upcoming collections.
The Jones Group is engaged in designing, manufacturing and marketing of dresses and suits, women’s collection sportswear, jeanswear and causal sportswear for women and children, women’s and men’s accessories and footwear. The company has a well-developed network of distribution channels, covering better department and specialty stores as well as mass merchandisers, mostly in Europe, Canada, and the United States. The retailer has its own network of factory and retail outlets and the websites of e-commerce. In addition, the JNY licenses the use of several of their brand names to selected distributors and manufacturers of women’s and men’s accessories and apparel throughout the world (Jones Group Inc. Form 10-K (Annual Report) 48). Jones Group spokesman stated that the company tracks demographic profile of its customers by brand and is known for being culturally relevant in its model choices (“Jones Group Inc (JNY) Company Profile”). Recently, store personnel of Jones Group were given iPods to provide a real-time service and better assist its customers (Tode). While having these devices along, store associates do not need to be near the cash-counters all the time. They allow clients to pay for their purchases with a credit card via iPod. The head of Global Retail and International Development, Scott Bowman, acknowledged that the company is aimed to do its best to make the in-store visit of their customers “interactive and efficient” (“The Jones Group Inc., Leverages the Power of Mobility With Epicor Retail Mobile Store to Enhance Store Operations, Customer Service.”). A soft-ware developer company representative, Diane Cerulli, commented on this unique concept calling it “inspiring and friction-less experience”.
The Jones Group promotes its branded products using “a cooperative advertising program.” This PR strategy allows the retailer to cut on promotional and advertising expenses in various media “up to either a preset maximum percentage of the customer’s purchases or an agreed upon rate of contribution.” A significant chapter of marketing campaign covers spectacular displays of JNY products in wholesale customers’ fashion catalogs and displays across the stores (Jones Group Inc. Form 10-K (Annual Report) 22).
JNY had a multi-face promotional campaign aimed at “empowering women” and strengthening their confidence. The national campaign involved a number of top models such as Julia Stegner and Emanuela de Paula. The models were dressed in an “easy care” white short, which were on the list of must-haves of spring season (see fig.1). The regional part of advertising was centered on five influential and successful women of Washington D.C. The photo sessions were produced by Norman Jean Roy and featured Sophie LaMontage, Katherine Kallinis, Sheila Brooks, Dee Dee Myers and Nellie Robinson (see fig. 2-5).
The JNY Spring 2011 ‘Empowering Your Confidence’ advertising was spread across many national magazines and newspapers, taxi tops and bus shelters, on eye-catching billboards in New York, a digital campaign on several websites (“Jones New York Launches the Next Phase of “Empowering Your Confidence” Campaign”).
2011 was a successful year for another brand of Jones Group, Rachel Roy. The brand continued to gain a significant momentum at all levels. Rachel Roy (see fig.6) was “a style muse and influencer” of 2011. She often appeared on magazines and blogs due to her good looks and designs (Jones Group Inc. Form 10-K (Annual Report) 23). Rachel Roy and Rachel Rachel Roy were popular in a large circle of celebrities and highlighted in such magazines as US Weekly, People and Life & Style. Among its devotees are Hale Berry, Jessica Alba and Sarah Jessica Parker and others. The designer took up a charitable initiative named “Kindness Is Always Fashionable” and donated money to Orphan Aids Africa, which helps children to grow up in “safe, permanent family settings” (“Kindness Is Always Fashionable: Rachel Roy’s Designs Clutch in Support of Orphan Aid Ghana”).
EBTD (Everything But The Dress) is a promotional campaign by Kurt Geiger was aimed to align a specific line of accessories with other products of JNY (Jones Group Inc. Form 10-K (Annual Report) 24). Early known only for his footwear creations, Kurt Geiger made a collection of accessories able to complement any outfit. Rebecca Farrar-Hockley, the brand’s creative director, commented that accessories play a pivotal role in the contemporary fashion. She compared a dress with no accessories with a party without a cake (Lauren Milligan, Vogue). The top model Anja Rubik was representing this collection. Digital advertising and blogging were engaged as a marketing campaign for this line of Kurt Geiger (Jones Group Inc. Form 10-K (Annual Report) 25).
The Jones Group also engages in public conferences as a part of their PR. In 2012, the company took part at Goldman Sachs 2012 Global Retailing Conference. The retailer is said to present at Consumer & Retail Conference by Bank of America Merrill Lynch 2013, as well (“The Jones Group Inc. to Present at Bank of America Merrill Lynch 2013 Consumer & Retail Conference on March 12, 2013”).
Licensing of company’s brands allows various licensees to either manufacture or distribute particular creations under JNY trademarks. This kind of partnership is based on the designs provided and authorized by Jones Group. Another case scenario is the Jones Group product distribution in geographies, where the company does not have any business or operations (Jones Group Inc. Form 10-K (Annual Report) 25). This type of collaboration usually entitles a provision for the payment to Jones Group of a part of the licensee’s net sales of the licensed merchandise “against guaranteed minimum royalty payments”, which typically grows over the term of the deal.
The Jones Group has signed an agreement with Altair for the creation and universal distribution of ophthalmic sunglasses and eyewear under the Anne Klein brand. This company will replace Luxottica Group S.p.A., while its contract with the retailer expired at the end of 2012. The new campaign will begin starting from spring season of the current year (“StreetInsider.com – Corporate News.”).
In July of 2011, The Jones Group announced its licensed agreement with Philip Simon Brands Group, Inc. A collection of fashion sneakers under the Nine West brand will be created and globally sold by Philip Simon Brands Group, a widely recognized for its cutting-edge and creative reputation in sneaker designs (Staley).
As a part of its licensing business, The Group also has a licensing and distribution agreements with BKA International, Inc. (BKA), which operates in the US, Canada and Puerto Rice under the brand of B Brian Atwood (“Jones Group Inc (JNY) Company Profile”).
Global sourcing strategies
The clothing product lines have different teams of designers, which are entirely in charge of a particular line of garments. The retailer engages talented personnel, who have a keen eye on new models and modern tendencies. The designers have regular trips abroad to stay tuned for emerging trends. Consumer’s demand is regularly monitored to determine the popularity of company’s clothing solutions.
For sportswear lines, the company has a few groups in each season. A group typically covers a range of skirts, jeanswear, pants and different accessories. Footwear and accessories are designed both by in-house specialists and third-party experts. The teams have extensive trips to different regions worldwide with the purpose of obtaining the insights and ideas for new collections, based on customer’s fashion preferences and color palette choices. Jewelry lines are in hands of separate designers’ teams, who try to support a special character of each brand. The Jones Group produces its drawings, on which their contractors base their production of jewelry. The company keeps the right to inspect and approve the designs of products produced by its licensees.
The apparel is produced through a well-developed network of contractors around the world. The Jones Group has its manufacturing facilities in Africa and Middle East. The company’s garments are made taking into account best practices of previous years for the current one, economic situation and managerial expectations from each of apparel divisions. Despite a substantial part of outsourcing capacities, the Jones Group conducts a regularly check of their merchandise in order to make sure they are aligned with corporate standards. The management of the company has a strong belief that such a scheme of production allows leveraging the manufacturing flexibility, cutting on capital costs and optimizing its stuff management system (Jones Group Inc. Form 10-K (Annual Report) 13).
Production planning and strategies
The raw materials are usually bought by the Jones Grouup vendors according to retailer’s requirements. However, there are cases, when the company supplies the raw material to the manufacturer (jeanswear and sportswear). Raw materials are usually purchased from local and overseas textile companies. The main material for jeanswear products is denim. The prices are revised and negotiated on a regular basis. The Jones Group has long-term business arrangements with its Asian and European manufacturers.
For a particular season’s style, the Jones Group places the projected orders before the actual customers’ orders arrive. The company has a reliable network of third party manufacturers and substantially benefits from the flexible manufacturing schedule as well as the bulk production of shoes in a limited period of time. The Jones Group is able to keep up with unexpected queries for a peculiar range of merchandise and adjust to market demands faster and lower on risks (Jones Group Inc. Form 10-K (Annual Report) 18).
Almost all footwear products were made in China during 2011. The exception was Kurt Geiger and Stuart Weitzman merchandise, which was mainly produced in South European countries. As for handbags and leather varieties, they are manufactured predominantly in China and sourced with the help of regional subsidiary in the country. The company’s merchandise is being paid for principally with US Dollars. The other currencies used in business operating with vendors are Euros and GBPs (Jones Group Inc. Form 10-K (Annual Report) 19).
In 2012, Cynthia DiPietrantonio was appointed as a Chief Operating Officer (COO), including the responsibilities of daily operations and overseas production in Hong Kong and China. She is expected to go on with the integral strategy of the company with regard to its “seamless supply chain” (“The Jones Group promotes DiPietrantonio to COO”).
Quality control procedures
The Jones Group relies on a diverse quality control system. The raw materials are checked at the warehouses either by contractors or third-party inspectors. As for products inspection, the quality of merchandise is monitored and controlled during the production process by quality control staff.
The Jones Group overseas manufacturers are controlled by associates in China, Hong Kong and the Middle East, buying agents located in other countries and independent contractors and inspection services. Ready-made merchandise is usually delivered to the warehouse of the company for a pre-distribution inspection. Additionally, the clothing merchandise is tested to ensure it corresponds to actual safely regulations and laws (Jones Group Inc. Form 10-K (Annual Report) 18).
“JNY Revenues for the fourth quarter of 2012 were $972 million, as compared with $894 million for the fourth quarter of 2011. Revenues for the full year 2012 were $3,798 million, as compared with $3,785 million for the full year 2011.”
The Jones Group CFO mentioned that the company’ management is satisfied with the results of the fiscal year of 2012. On the one hand, Mr. Card acknowledged that retail and sportswear sectors were more challenging, even though they have invested significant promotional efforts in these divisions. Despite the unstable economic conditions in the EU, the Jones Group’s international operations were still at the acceptable level. He also added that the team is determined to grow profitability and maintain the operational excellence, control expenses and run a successful business. In addition, the spokesman declared that a strong belief that the Jones Group’s innovative approach to design and branding strategy will keep their existing brands afloat, while working on new ideas and modern tendencies (“The Jones Group Inc. Reports 2012 Fourth Quarter And Full Year Financial Results”).
The company has recorded the revenue growth, comparing to end results of previous fiscal year. This sales increase was mainly due to a high performance of US retail outlets, selling jeans, jewelry and footwear. The Jones Group’s retailing business remained challenging even during the holiday rush. This resulted into an over $80 million for the three months through the end month of the year (Associated Press).
The starting year trend is quite positive and mainly encouraged by the promotional campaign, gift cards and winter season, which boost the sales of seasonal apparel (“The Jones Group Inc. Reports 2012 Fourth Quarter And Full Year Financial Results”).
The Jones Group is planning to strengthen its financial performance by concentrating efforts on several business directions such as changing to brand management strategy, breathing new life into essential brands, advancing new brands, enlarging its international presence, enhancing “direct-to-customer” practice and cultivating operational supremacy ((“The Jones Group Inc. Reports 2012 Fourth Quarter And Full Year Financial Results”).
The company has a strong belief in their key brands and is not afraid to present a market with new brands, despite its volatile financial performance. The Jones Group is committed to a stable development and retains one of the leading positions in the industry in the current financial year.