Pressure Cooker

Tough times apparently call for drastic measures. Faced with more than a year of disappointing earnings reports, three of the biggest U.S. public apparel conglomerates are redefining the role of the wholesaler.

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WWD Year In Fashion issue 2007/12/11
Card, 59, joined Jones in 1990 as chief financial officer and added the chief operating officer title in 2002. He focused entirely on his chief operating officer role starting last year, when Thimio Sotos took over the financial responsibilities. After Sotos resigned in March, Card again wore both hats. John McClain, chief accounting officer of Avis Budget Group (formerly Cendant Corp.), took over for Card as cfo in July when Card moved up to the top job.

After a failed attempt to sell the company in 2006, Boneparth, who had been at the helm since 2002, resigned as president and ceo in July. The timing of Boneparth's resignation was unexpected, following Boneparth and Jones issuing each other "non-extension notices" in March, saying Boneparth's contract would not be renewed past its March 31, 2009 end. Sources speculated Boneparth has known since then that he would resign and had spent the last three months negotiating his contract, which was believed to total around $15 million.

The timing was additionally odd considering it came in the middle of the sale of Barneys New York, widely considered the feather in Boneparth's Jones hat. Amid naysaying, he bought the upscale retailer in 2004 for $397.5 million — and the company sold it three years later for more than twice that.

After a two-month bidding war between Dubai-based investment fund Istithmar and Fast Retailing Co. Ltd. of Japan, in August Istithmar finally won with an all-cash $942.3 million offer, after Fast decided to drop out. The Dubai fund had inked a deal with Jones in June for $825 million, but Fast entered with a $900 million offer — which Istithmar then matched. Fast raised the stakes again with a $950 million cash bid, but stopped there. Jones would have been obligated to pay Istithmar a breakup fee of $34.7 million, so it decided to take the Istithmar deal.
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