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.


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • 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.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2526911, ~/Articles/ArticleHandler.aspx, 11/27/2014 8:11:20 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement