Why Jones Group Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Jones Group (NYSE: JNY  ) were riding higher today, gaining as much as 16% on reports that the apparel-and-footwear seller may be seeking a buyer.

So what: The parent of Nine West and Jones New York has retained Citigroup to explore a possible sale, according to Reuters. Jones Group has been struggling, recently announcing that it will close about 170 underperforming stores in the next year and lay off 8% of its workforce. The retailer had also previously looked into selling itself in 2006 but couldn't find an interested party.

Now what: That record doesn't instill confidence in the company's appeal as an acquisition target. Factor in its shares' hitting a nearly three-year high on today's news, and the company seems even less desirable for a buyer. Sales have also flatlined as the brands have stagnated. Following the afternoon pop, shares cooled off to finish up 7.6%, but again, any gains from the report will only serve as a disincentive to a potential buyer. I wouldn't get my hopes up. To follow this developing story, all you need to do is add Jones Group to your Watchlist here.


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  • Report this Comment On July 08, 2013, at 11:23 PM, grahamsway wrote:

    JNY is really interesting. Buyout or no buyout there seems to be a lot of potential value on the table.

    I've looked at a lot of comps and haven't found one yet that puts JNY at fair value, even after the author's stated disincentivizing price rise today.

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Related Tickers

12/31/1969 7:00 PM
JNY $0.00 Down +0.00 +0.00%
The Jones Group In… CAPS Rating: ****

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