With Barneys in Hand, Boneparth Seeks to Double Its Size

“Jones wasn’t on our list to call,’’ he said. “This is really about the vision of Peter and his team. In retrospect, we think it is a very smart vision. Peter is looking to build a portfolio that is diversified, an apparel business that is bullet proof and has consistent growth through good years and bad years. This is an interesting way to build in some of that diversification by gaining access to the luxury market with one of the premium brands in that market place.”

Cooper said that’s what many firms need to do to grow their business, but it’s all about what decisions they make to get there.

“As large firms have to grow, they’ll become more creative even if it entails doing things that one wouldn’t have thought was natural in the company’s business life,” said Gilbert Harrison, chairman of investment banking firm Financo Inc.

Harrison added that a “deal, however, has to make sense, and a company’s board and shareholders, as well as public investors, may question the logic behind any acquisition, especially if there’s no synergy or compatibility between the buyer and seller.”

Paul Altman, a banker at The Sage Group, said the purchase price of $400 million is “7.9 times earnings before interest, taxes, depreciation and amortization and 0.9 times revenue multiples.” Other better-to-premium retailers trade at slightly lower EBITDA multiples, with the average at seven times, and with similar revenue multiples. The purchase price for Barneys, he concluded, is in line with other public retailers.

As for what Barneys brings to the Jones umbrella, Altman said, “What Jones gets is a world-class retail brand and it is up to Jones to effectively leverage that brand equity. In terms of Jones’ wholesale business, given their acquisitive history, this purchase expands Jones’ universe of potential purchases down the road to include the type of luxury brands that Barneys sells.”

At A Glance: Jones Apparel Group

	SPECIALTY RETAIL
BRAND	NUMBER OF STORES	FACTORY OUTLETS
Nine West	217	134
Easy Spirit	145	101
Enzo Angiolini	24	0
Bandolino	16	0
Jones New York	0	127
Kasper	0	70
Anne Klein	0	12

WHOLESALE APPAREL
BRAND GROUPS	RETAIL PRICES
Jones New York	$15-$458
Nine West	$19-$307
Anne Klein	$20-$1,895
McNaughton	$29-$80
Gloria Vanderbilt	$26-$72

SOURCE: JONES ANNUAL REPORT