Jones Group Inc., a fashion company that owns retail chains Nine West and Jones New York, said it will close about 170 underperforming U.S. stores by mid-2014 and cut its workforce by about 8 percent in a bid to improve profits.
Shares of the company fell 4 percent in premarket trading on Wednesday after it announced the cuts, which it said would cost it about $40 million to $60 million over the next 15 months.
Jones' U.S. stores have struggled for some time in the face of aggressive competition and sales fell during 2012 year-end holiday season.
U.S. retail staff will be cut by about 18 percent and corporate, support and supply chain staff by about 2 percent, Jones Group said in a statement.
Jones, which gets nearly half of its revenue by selling to chains like Macy's Inc and Nordstrom Inc, estimated first-quarter adjusted earnings of about 15 cents per share on revenue of about $1 billion.
Analysts on average were expecting earnings of about 25 cents per share on revenue of $997.4 million, according to Thomson Reuters I/B/E/S.
The company's shares closed at $13.60 on the New York Stock Exchange on Tuesday.
The company had about 6,250 full-time employees and about 5,540 part-time employees as of December 31, 2012, according to a regulatory filing.
The restructuring is already underway and includes 50 store closures announced in the fourth quarter of 2012, Jones said.
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