Jones Apparel What Improvements ??

Jones Apparel (JNY) issued Q4 results and wants the investment world to believe that the losses are narrowing and therefore are better.

Wesley R. Card, Jones Apparel Group President and Chief Executive Officer, stated, “As we enter 2008, we expect to begin to realize the benefits of many of the turnaround and recovery initiatives that have been implemented throughout the Company, including enhancing our product offerings, streamlining of our supply chain and distribution networks, as well as jettisoning several of our marginally profitable businesses.

John T. McClain, Jones Apparel Group Chief Financial Officer, commented, "Our financial position remains strong. We ended the year with $303 million of cash and $783 million of total debt, which is $107 million less debt than at year-end 2006.

OK so what really happened? If you read the sources and uses of cash you will see that they off loaded Barney’s and realized approximately $845 million on this exit. Barney’s was a bad deal and the exit was the right thing to do. The company does take $100 million and reduces debt (Banks probably insisted). An overwhelming $497 million was spent on buying back stock. The net cash realized is $248 million from these three items. Which is about what the increase in cash is reported as?

Everything else had no significant effect. The stock has been declining throughout the year. Share repurchases have been increasingly a poor idea and have not been successful in propping up the share price.

It’s hard to understand what they have invested in and why investors should be optimistic about their future in this stock. Management comments are not to the point in this release.