10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 2, 2005

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 1-10746

JONES APPAREL GROUP, INC.
(Exact name of registrant as specified in its charter)

Pennsylvania (State or other jurisdiction of incorporation or organization)	06-0935166 (I.R.S. Employer Identification No.)
250 Rittenhouse Circle Bristol, Pennsylvania (Address of principal executive offices)	19007 (Zip Code)

(215) 785-4000
(Registrant's telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [x] No [   ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Yes [x] No [   ]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class of Common Stock
$.01 par value Outstanding at May 3, 2005
120,622,542

JONES APPAREL GROUP, INC.

Index		Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
	Consolidated Balance Sheets     April 2, 2005, April 3, 2004 and December 31, 2004	3
	Consolidated Statements of Income     Fiscal Quarters ended April 2, 2005 and April 3, 2004	4
	Consolidated Statements of Stockholders' Equity     Fiscal Quarters ended April 2, 2005 and April 3, 2004	5
	Consolidated Statements of Cash Flows     Fiscal Quarters ended April 2, 2005 and April 3, 2004	6
	Notes to Consolidated Financial Statements	7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		16
Item 3. Quantitative and Qualitative Disclosures About Market Risk		21
Item 4.  Controls and Procedures		21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		22
Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities		23
Item 5. Other Information		24
Item 6. Exhibits		24
Signatures		25
Exhibit Index		26

DEFINITIONS

As used in this Report, unless the context requires otherwise, "our," "us" and "we" means Jones Apparel Group, Inc. and consolidated subsidiaries, "Nine West" means Nine West Footwear Corporation, "McNaughton" means McNaughton Apparel Group Inc., "Gloria Vanderbilt" means Gloria Vanderbilt Apparel Corp.,"Kasper" means Kasper, Ltd., "Maxwell" means Maxwell Shoe Company Inc. (acquired July 8, 2004), "Barneys" means Barneys New York, Inc. (acquired December 20, 2004), "SFAS" means Statement of Financial Accounting Standards and "SEC" means the United States Securities and Exchange Commission.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Jones Apparel Group, Inc. 
Consolidated Balance Sheets 
(All amounts in millions except per share data)
  

		April 2, 2005	April 3, 2004	December 31, 2004
		(Unaudited)	(Unaudited)
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents	$  45.4	$  31.9	$ 45.0
	Accounts receivable	680.6	638.5	448.3
	Inventories	645.8	570.0	664.2
	Deferred taxes	62.8	75.7	68.2
	Prepaid expenses and other current assets	73.5	46.7	70.5
	TOTAL CURRENT ASSETS	1,508.1	1,362.8	1,296.2
PROPERTY, PLANT AND EQUIPMENT, at cost, less accumulated depreciation and amortization of $499.9, $384.6 and $499.7		301.0	266.1	303.6
GOODWILL		2,124.6	1,637.0	2,125.0
OTHER INTANGIBLES, at cost, less accumulated amortization		791.5	758.3	768.2
OTHER ASSETS		56.7	51.5	57.8
		$ 4,781.9	$ 4,075.7	$ 4,550.8
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
	Short-term borrowings	$ 196.5	$ 295.5	$  69.2
	Current portion of long-term debt and capital lease obligations	133.5	180.7	134.0
	Accounts payable	266.1	213.6	259.3
	Income taxes payable	78.3	62.4	23.7
	Accrued employee compensation	36.9	28.2	51.3
	Accrued expenses and other current liabilities	134.6	100.2	146.4
	TOTAL CURRENT LIABILITIES	845.9	880.6	683.9
NONCURRENT LIABILITIES:
	Long-term debt	977.1	353.8	977.0
	Obligations under capital leases	39.3	42.4	39.6
	Deferred taxes	142.0	126.6	135.0
	Other	82.0	58.6	61.4
	TOTAL NONCURRENT LIABILITIES	1,240.4	581.4	1,213.0
	TOTAL LIABILITIES	2,086.3	1,462.0	1,896.9
COMMITMENTS AND CONTINGENCIES		-	-	-
STOCKHOLDERS' EQUITY:
	Preferred stock, $.01 par value - shares authorized 1.0;  none issued	-	-	-
	Common stock, $.01 par value - shares authorized 200.0; issued 151.1, 149.5 and 150.1	1.5	1.5	1.5
	Additional paid-in capital	1,250.2	1,207.0	1,236.4
	Retained earnings	2,279.0	2,031.5	2,204.2
	Accumulated other comprehensive income (loss)	(0.8)	2.3	0.8
	Treasury stock, 29.3, 23.4 and 27.9 shares, at cost	(834.3)	(628.6)	(789.0)
	TOTAL STOCKHOLDERS' EQUITY	2,695.6	2,613.7	2,653.9
		$ 4,781.9	$ 4,075.7	$ 4,550.8

See accompanying notes to consolidated financial statements

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Jones Apparel Group, Inc. 
Consolidated Statements of Income (Unaudited) 
(All amounts in millions except per share data)
  

	Fiscal Quarter Ended
	April 2, 2005	April 3, 2004
Net sales	$ 1,335.1	$ 1,205.0
Licensing income (net)	14.2	13.1
Total revenues	1,349.3	1,218.1
Cost of goods sold	850.6	756.5
Gross profit	498.7	461.6
Selling, general and administrative expenses	340.4	299.7
Operating income	158.3	161.9
Interest income	0.5	1.3
Interest expense and financing costs	19.4	13.0
Equity in earnings of unconsolidated affiliates	0.9	0.8
Income before provision for income taxes	140.3	151.0
Provision for income taxes	53.3	56.6
Net income	$ 87.0	$ 94.4
Earnings per share
Basic	$0.72	$0.75
Diluted	$0.71	$0.73
Weighted average common shares and share equivalents outstanding
Basic	121.2	125.2
Diluted	122.7	130.1
Dividends declared per share	$0.10	$0.08

See accompanying notes to consolidated financial statements

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Jones Apparel Group, Inc.
Consolidated Statements of Stockholders' Equity (Unaudited)
(All amounts in millions except per share data)
  

		Number of common shares outstanding	Total stock- holders' equity	Common stock	Additional paid-in capital	Retained earnings	Accumu- lated  other compre- hensive income (loss)	Treasury stock
Balance, January 1, 2004		126.2	$ 2,537.8	$ 1.5	$ 1,179.4	$ 1,947.2	$ 3.8	$ (594.1)
Fiscal quarter ended April 3, 2004:
Comprehensive income:
	Net income	-	94.4	-	-	94.4	-	-
	Change in fair value of cash flow hedges, net of $0.1 tax	-	0.1	-	-	-	0.1	-
	Reclassification adjustment for hedge gains and losses included in net income, net of $0.7 tax	-	(1.2)	-	-	-	(1.2)	-
	Foreign currency translation adjustments	-	(0.4)	-	-	-	(0.4)	-
	Total comprehensive income		92.9
Issuance of restricted stock to employees		0.1	-	-	-	-	-	-
Amortization expense in connection with employee stock options and restricted stock		-	4.6	-	4.6	-	-	-
Exercise of employee stock options		0.8	20.3	-	20.3	-	-	-
Tax benefit derived from exercise of employee stock options		-	2.7	-	2.7	-	-	-
Dividends on common stock ($0.08 per share)		-	(10.1)	-	-	(10.1)	-	-
Treasury stock acquired		(1.0)	(34.5)	-	-	-	-	(34.5)
Balance, April 3, 2004		126.1	$ 2,613.7	$ 1.5	$ 1,207.0	$ 2,031.5	$ 2.3	$ (628.6)
Balance, January 1, 2005		122.2	$ 2,653.9	$ 1.5	$ 1,236.4	$ 2,204.2	$ 0.8	$ (789.0)
Fiscal quarter ended April 2, 2005:
Comprehensive income:
	Net income	-	87.0	-	-	87.0	-	-
	Change in fair value of cash flow hedges, net of $0.7 tax	-	(1.2)	-	-	-	(1.2)	-
	Reclassification adjustment for hedge gains and losses included in net income, net of $0.6 tax	-	(0.9)	-	-	-	(0.9)	-
	Foreign currency translation adjustments	-	0.5	-	-	-	0.5	-
	Total comprehensive income		85.4
Issuance of restricted stock to employees		0.7	-	-	-	-	-	-
Amortization expense in connection with employee stock options and restricted stock		-	4.6	-	4.6	-	-	-
Exercise of employee stock options		0.3	8.3	-	8.3	-	-	-
Tax benefit derived from exercise of employee stock options		-	0.9	-	0.9	-	-	-
Dividends on common stock ($0.10 per share)		-	(12.2)	-	-	(12.2)	-	-
Treasury stock acquired		(1.4)	(45.3)	-	-	-	-	(45.3)
Balance, April 2, 2005		121.8	$ 2,695.6	$ 1.5	$ 1,250.2	$ 2,279.0	$ (0.8)	$ (834.3)

See accompanying notes to consolidated financial statements

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Jones Apparel Group, Inc. 
Consolidated Statements of Cash Flows (Unaudited) 
(All amounts in millions)
  

			Fiscal Quarter Ended
			April 2, 2005	April 3, 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income			$ 87.0	$ 94.4
Adjustments to reconcile net income to net cash used in operating activities, net of acquisitions:
	Amortization of original issue discount		-	1.3
	Depreciation and other amortization		25.2	27.9
	Provision for losses on accounts receivable		1.0	(0.2)
	Deferred taxes		13.6	9.3
	Losses on redemption of Zero Coupon Convertible Senior Notes		-	8.4
	Other		(0.5)	(0.2)
	Changes in operating assets and liabilities:
		Accounts receivable	(233.4)	(253.0)
		Inventories	18.2	21.6
		Prepaid expenses and other current assets	(5.3)	2.2
		Other assets	2.6	(3.2)
		Accounts payable	3.9	(24.2)
		Income taxes payable	49.9	50.1
		Accrued expenses and other liabilities	(20.4)	(17.7)
		Total adjustments	(145.2)	(177.7)
		Net cash used in operating activities	(58.2)	(83.3)
CASH FLOWS FROM INVESTING ACTIVITIES:
	Capital expenditures		(17.6)	(13.5)
	Payments relating to acquisition of Kasper		-	(37.8)
	Payments relating to acquisition of Barneys		(4.1)	-
	Acquisition of intangibles		(0.1)	-
	Other		0.2	-
		Net cash used in investing activities	(21.6)	(51.3)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Net borrowings under credit facilities		127.2	295.5
	Redemption of Zero Coupon Convertible Senior Notes		-	(446.6)
	Principal payments on capital leases		(1.3)	(1.5)
	Debt issuance costs		(0.4)	-
	Purchases of treasury stock		(42.3)	(41.1)
	Dividends paid		(12.2)	(10.1)
	Proceeds from exercise of employee stock options		8.3	20.3
		Net cash provided by (used in) financing activities	79.3	(183.5)
EFFECT OF EXCHANGE RATES ON CASH			0.9	-
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			0.4	(318.1)
CASH AND CASH EQUIVALENTS, BEGINNING			45.0	350.0
CASH AND CASH EQUIVALENTS, ENDING			$ 45.4	$ 31.9

See accompanying notes to consolidated financial statements

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JONES APPAREL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

BASIS OF PRESENTATION

    The consolidated financial statements include the accounts of Jones Apparel Group, Inc. and its wholly-owned subsidiaries. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and in accordance with the requirements of Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and the footnotes thereto included within our Annual Report on Form 10-K/A. The results of Maxwell and Barneys are included in our operating results from the date of acquisition and, therefore, our operating results for the periods presented are not comparable.

    In our opinion, the information presented reflects all adjustments necessary for a fair statement of interim results. All such adjustments are of a normal and recurring nature. Certain reclassifications have been made to conform prior year data with the current presentation. The foregoing interim results are not necessarily indicative of the results of operations for the full year ending December 31, 2005.

STOCK-BASED EMPLOYEE COMPENSATION

    Prior to January 1, 2003, pursuant to a provision in SFAS No. 123, "Accounting for Stock-Based Compensation," we had elected to continue using the intrinsic-value method of accounting for stock options granted to employees in accordance with Accounting Principles Board Opinion 25, "Accounting for Stock Issued to Employees." Accordingly, compensation expense for stock options had been measured as the excess, if any, of the quoted market price of our stock at the date of the grant over the amount the employee must pay to acquire the stock. Under this approach, we had only recognized compensation expense for options awarded to employees for options granted at below-market prices, with the expense recognized over the vesting period of the options. Had we elected to adopt the fair value approach of SFAS No. 123 upon its effective date, our net income would have decreased accordingly.

    Effective January 1, 2003, we adopted the fair value method of accounting for employee stock options for all options granted after December 31, 2002 pursuant to the "prospective method" set forth in SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure." Under this approach, the fair value of the option on the date of grant (as determined by the Black-Scholes-Merton option pricing model) is amortized to compensation expense over the option's vesting period.

    Both the stock-based employee compensation cost included in the determination of net income as reported and the stock-based employee compensation cost that would have been included in the determination of net income if the fair value based method had been applied to all awards, as well as the resulting pro forma net income and earnings per share using the fair value approach, are presented in the following table. These pro forma amounts may not be representative of future disclosures, since the fair value of stock options is amortized to expense over the vesting period and additional options may be granted in future years.

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	Fiscal Quarter Ended
(In millions except per share data)	April 2, 2005	April 3, 2004
Net income - as reported	$ 87.0	$ 94.4
Add: stock-based employee compensation cost, net of related tax effects, included in the determination of net income as reported	2.8	2.8
Deduct: stock-based employee compensation cost, net of related tax effects, that would have been included in the determination of net income if the fair value-based method had been applied to all awards	(3.3)	(4.3)
Net income - pro forma	$ 86.5	$ 92.9
Basic earnings per share
As reported	$0.72	$0.75
Pro forma	$0.71	$0.74
Diluted earnings per share
As reported	$0.71	$0.73
Pro forma	$0.71	$0.72

EARNINGS PER SHARE

    The computation of basic and diluted earnings per share is as follows:

	Fiscal Quarter Ended
(In millions except per share amounts)	April 2, 2005	April 3, 2004
Basic
Net income	$ 87.0	$ 94.4
Weighted average common shares outstanding	121.2	125.2
Basic earnings per share	$ 0.72	$ 0.75
Diluted
Net income	$ 87.0	$ 94.4
Add: interest expense associated   with convertible notes, net of tax benefit	-	0.8
Income available to common shareholders	$ 87.0	$ 95.2
Weighted average common shares outstanding	121.2	125.2
Effect of dilutive securities:
Employee stock options	1.5	2.2
Assumed conversion of convertible notes	-	2.7
Weighted average common shares and            share equivalents outstanding	122.7	130.1
Diluted earnings per share	$ 0.71	$ 0.73

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ACCOUNTS RECEIVABLE

    Accounts receivable consist of the following:

(In millions)	April 2, 2005	April 3, 2004	December 31, 2004
Trade accounts receivable	$ 704.5	$ 693.2	$ 458.3
Credit card receivable	33.8	-	36.2
Allowances for doubtful accounts, returns, discounts and co-op advertising	(57.7)	(54.7)	(46.2)
	$ 680.6	$ 638.5	$ 448.3

ACCRUED RESTRUCTURING COSTS

    In connection with the acquisitions of McNaughton, Gloria Vanderbilt, Kasper and Maxwell, we assessed and formulated plans to restructure certain operations of each company. These plans involved the closure of distribution facilities and certain offices. The objectives of the plans were to eliminate unprofitable or marginally profitable lines of business and reduce overhead expenses. We have also restructured several of our operations, including the closing of Canadian and Mexican production facilities and the closing of an administrative, warehouse and preproduction facility in El Paso, Texas. The accrual of these costs and liabilities, which are included in accrued expenses and other current liabilities, is as follows:

(In millions)	Severance and other employee costs	Closing and consolidation of facilities	Total
Balance, January 1, 2004	$ 6.9	$ 3.7	$ 10.6
Net reversals	(0.1)	(0.1)	(0.2)
Payments and reductions	(3.0)	(2.3)	(5.3)
Balance, April 3, 2004	$ 3.8	$ 1.3	$ 5.1
Balance, January 1, 2005	$ 6.5	$ 18.1	$ 24.6
Net reversals	(0.4)	(1.3)	(1.7)
Payments and reductions	(5.6)	(3.6)	(9.2)
Balance, April 2, 2005	$ 0.5	$ 13.2	$ 13.7

    Estimated severance payments and other employee costs of $0.5 million accrued at April 2, 2005 relate to the remaining estimated severance for an estimated 13 employees at locations to be closed. Employee groups affected (totaling an estimated 1,041 employees) include administrative, warehouse and management personnel at locations closed.

    The $0.4 million reversal in the fiscal quarter ended April 2, 2005 represents $0.3 million of adjustments related to severance accruals for the Kasper and Maxwell acquisitions, which were recorded as reductions of goodwill, and $0.1 million related to the closing of the Mexican and El Paso facilities, which was recorded as a reduction of selling, general and administrative expenses in the moderate wholesale apparel segment.

    The $0.1 million reversal in the fiscal quarter ended April 3, 2004 represents an adjustment related to the Gloria Vanderbilt acquisition, which was recorded as a reduction of goodwill.

    During the first fiscal quarters of 2005 and 2004, $5.6 million and $3.0 million, respectively, of the reserve was utilized (relating to partial or full severance and related costs for 122 and 113 employees, respectively).

    The $13.2 million accrued at April 2, 2005 for the consolidation of facilities relates to expected costs to be incurred, including lease obligations, for closing certain acquired facilities in connection with consolidating their

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operations into our other existing facilities. The $1.3 million reversal in the first fiscal quarter of 2005 represents an adjustment related to the closing of a Maxwell facility, which was recorded as a reduction of goodwill. The $0.1 million reversal in the first fiscal quarter of 2004 represents an adjustment related to the Canadian production facility, which was recorded as a reduction of operating expenses in the wholesale better apparel segment.

    Our plans have not been finalized in all areas, and additional restructuring costs may result as we continue to evaluate and assess the impact of duplicate responsibilities, warehouses and office locations. We do not expect any final adjustments to be material. Any additional costs relating to Maxwell before July 8, 2005 will be recorded as goodwill; after that date, additional costs will be charged to operations in the period in which they occur. Any costs not related to Maxwell will be charged to operations in the period in which they occur.

INVENTORIES

    Inventories are summarized as follows (in millions):

	April 2, 2005	April 3, 2004	December 31, 2004
Raw materials	$ 22.2	$ 23.9	$ 21.5
Work in process	41.9	48.0	33.6
Finished goods	581.7	498.1	609.1
	$ 645.8	$ 570.0	$ 664.2

STATEMENT OF CASH FLOWS

Fiscal Quarter Ended: (In millions)	April 2, 2005	April 3, 2004
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$ 10.6	$ 7.4
Net income tax refunds	(11.1)	(3.4)
Supplemental disclosures of non-cash investing and financing activities:
Tax benefits related to exercise of employee stock options	0.9	2.7
Equipment acquired through capital lease financing	0.5	-
Restricted stock issued to employees	23.3	3.7

DERIVATIVES

    SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," subsequently amended by SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities" and SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" (as amended, hereinafter referred to as "SFAS 133"), establishes accounting and reporting standards for derivative instruments. Specifically, SFAS 133 requires us to recognize all derivatives as either assets or liabilities on the balance sheet and to measure those instruments at fair value. Additionally, the fair value adjustments will affect either stockholders' equity or net income, depending on whether the derivative instrument qualifies as a hedge for accounting purposes and, if so, the nature of the hedging activity.

    We are exposed to market risk related to changes in foreign currency exchange rates. We have assets and liabilities denominated in certain foreign currencies and purchase products from foreign suppliers who require payment in funds other than the U.S. Dollar. At April 2, 2005, we had outstanding foreign exchange contracts to exchange Canadian Dollars for a total of US$5.0 million through June 2005, US $23.9 million for Euros through March 2006 and US $0.8 million for British Pounds through January 2006.

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    We recorded amortization of net gains resulting from the termination of interest rate swaps and locks of $1.8 million and $2.1 million during the fiscal quarters ending April 2, 2005 and April 3, 2004, respectively, as a reduction of interest expense. We reclassified $0.3 million and $0.2 million of net losses from foreign currency exchange contracts to cost of sales during the fiscal quarters ending April 2, 2005 and April 3, 2004, respectively. There has been no material ineffectiveness related to our foreign currency exchange contracts as the instruments are designed to be highly effective in offsetting losses and gains transactions being hedged. As of April 2, 2005, the estimated net amount of existing gains and losses reported in accumulated other comprehensive income that will be reclassified into earnings in the next 12 months include amortization of $5.8 million of net gains resulting from the termination of interest rate swaps as a reduction of interest expense. If foreign currency exchange rates do not change from their April 2, 2005 amounts, we estimate that any reclassifications from other comprehensive income to earnings within the next 12 months will not be material. The actual amounts that will be reclassified to earnings over the next 12 months could vary, however, as a result of changes in market conditions.

PENSION PLANS

Components of Net Periodic Benefit Cost

	Fiscal Quarter Ended
(In millions)	April 2, 2005	April 3, 2004
Interest cost	$ 0.6	$ 0.6
Expected return on plan assets	(0.5)	(0.5)
Amortization of net loss	0.3	0.2
Net periodic benefit cost	$ 0.4	$ 0.3

Employer Contributions

   We previously disclosed in our financial statements for the year ended December 31, 2004 that we expected to contribute $2.4 million to our pension plans in 2005. As of April 2, 2005, no contributions have been made. We presently anticipate contributing an additional $0.4 million to fund our plans in 2005 for a total of $2.8 million.

SEGMENT INFORMATION

    We identify operating segments based on, among other things, the way our management organizes the components of our business for purposes of allocating resources and assessing performance. Our operations are comprised of four reportable segments: wholesale better apparel, wholesale moderate apparel, wholesale footwear and accessories, and retail. Segment revenues are generated from the sale of apparel, footwear and accessories through wholesale channels and our own retail locations. The wholesale segments include wholesale operations with third party department and other retail stores, the retail segment includes operations by our own stores, and income and expenses related to trademarks, licenses and general corporate functions are reported under "other and eliminations." We define segment profit as operating income before net interest expense, equity in earnings of unconsolidated affiliates and income taxes. Summarized below are our revenues and income by reportable segment for the fiscal quarters ended April 2, 2005 and April 3, 2004.

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(In millions)	Wholesale  Better  Apparel	Wholesale  Moderate  Apparel	Wholesale  Footwear &  Accessories	Retail	Licensing,  Other &  Eliminations	Consolidated
For the fiscal quarter ended April 2, 2005
Revenues from external customers	$ 428.7	$ 355.1	$ 267.7	$ 283.6	$ 14.2	$ 1,349.3
Intersegment revenues	34.9	2.8	12.0	-	(49.7)	-
Total revenues	463.6	357.9	279.7	283.6	(35.5)	1,349.3
Segment income	$ 71.6	$ 45.6	$ 41.6	$ 10.4	$ (10.9)	158.3
Net interest expense						(18.9)
Equity in earnings of unconsolidated affiliates						0.9
Income before provision for income taxes						$ 140.3
For the fiscal quarter ended April 3, 2004
Revenues from external customers	$ 409.1	$ 395.3	$ 230.8	$ 169.8	$ 13.1	$ 1,218.1
Intersegment revenues	41.3	2.0	19.0	-	(62.3)	-
Total revenues	450.4	397.3	249.8	169.8	(49.2)	1,218.1
Segment income	$ 56.0	$ 60.6	$ 49.6	$ 7.7	$ (12.0)	161.9
Net interest expense						(11.7)
Equity in earnings of unconsolidated affiliates						0.8
Income before provision for income taxes						$ 151.0

ACQUISITIONS

    On July 8, 2004, we acquired all the outstanding shares of Maxwell. Maxwell designs and markets casual and dress footwear for women and children under multiple brand names, each of which is targeted to a distinct segment of the footwear market. Maxwell markets its products nationwide to national chains, department stores and specialty retailers. Maxwell offers footwear for women in the moderately priced market segment under the Mootsies Tootsies, Sam & Libby and Dockers Women brands, in the better market segment under the AK Anne Klein and Circa Joan & David brands and in the bridge segment under the Joan and David and Albert Nipon brands. Maxwell also sells moderately priced children's footwear under both the Mootsies Tootsies and Sam & Libby brands and licenses the J. G. Hook trademark from J. G. Hook, Inc. to source and develop private label products for retailers who require brand identification. Maxwell operates in the wholesale footwear and accessories segment.

    The acquisition of Maxwell is intended to provide further diversification in our footwear business and strengthen our positions in both the moderate and children's distribution channels. We also expect to benefit from the cross-branding opportunities that exist with our other lines of business.

    The aggregate purchase price was $377.1 million, which included $23.25 per share in cash for each outstanding share of Maxwell (for a total of $345.8 million) and $24.1 million related to Maxwell's employee stock options. The purchase price was allocated to Maxwell's assets and liabilities, tangible and intangible (as determined by an independent appraiser), with the excess of the purchase price over the fair value of the net assets acquired of approximately $208.7 million being recorded as goodwill in the wholesale footwear and accessories segment. The acquired goodwill relating to Maxwell will not be deductible for tax purposes.

    On December 20, 2004, we acquired 100% of the common stock of Barneys. Barneys is a luxury retailer that provides its customers with a wide variety of merchandise across a broad range of prices, including a diverse selection of Barneys label merchandise. Barneys' preferred arrangements with established and emerging designers, combined with creative merchandising, store designs and displays, advertising campaigns, publicity events and emphasis on customer service, has positioned it as a leading retailer of men's and women's fashion, cosmetics, jewelry and home furnishings. Barneys complements its merchandise offerings from designers such as Giorgio Armani, Manolo Blahnik, Marc Jacobs, Prada, Jil Sander and Ermenegildo Zegna with a diverse selection of Barneys label merchandise, including ready-to-wear apparel, handbags, shoes, dress shirts, ties and sportswear. Barneys label merchandise is manufactured by independent third parties according to Barneys' specifications and is of comparable quality to the designer merchandise. Barneys operates in the retail segment.

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    As our growth strategy has focused on diversification to provide a well-balanced portfolio of businesses, the acquisition of Barneys provides additional diversification by introducing a new competency in luxury specialty retailing. With an inherent diversified portfolio comprised of its own brand, as well as numerous other brands from new designers and classic design houses, Barneys provides entry into the high-growth, resilient luxury goods market.

    The aggregate cash purchase price was $295.5 million, which included $19.00 for each outstanding share of Barneys common stock (for a total of $264.5 million) and $26.7 million related to Barneys' employee stock options, preferred stock and stock warrants. We assumed approximately $106.0 million of Barneys funded debt, $102.2 million of which we subsequently refinanced. The purchase price was allocated to Barneys' assets and liabilities, with the excess of the purchase price over the fair value of the net assets acquired of approximately $273.4 million being recorded as goodwill in the retail segment.

    The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for Barneys. The allocation of the purchase price has not been finalized and is subject to refinement. Barneys' trademarks are currently being valued by an independent appraiser; the appraised value will be reclassified from goodwill to other intangible assets during the second quarter of 2005. Any additional adjustments resulting from the finalization of the purchase price allocations of Barneys will affect the amounts assigned to goodwill. Other than the reclassification of the fair value of trademarks, these adjustments are not expected to be material.

(In millions)

Current assets	$ 173.2
Property, plant and equipment	48.5
Intangible assets	25.8
Goodwill	273.4
Other assets	11.9
Total assets acquired	532.8
Current liabilities	105.5
Long-term debt	131.8
Total liabilities assumed	237.3
Net assets acquired	$ 295.5

    Amounts assigned to certain intangible assets (as determined by an independent appraiser) and the related useful lives are as follows (amounts in millions):

Class	Fair Value	Weighted-average useful life
Third-party license agreement	$ 4.0	31 years
Credit cardholder relationships	1.3	181 months
Customer database	0.2	145 months
Favorable leases	20.3	158 months

    In addition, $20.5 million was recorded as a long-term liability for an acquired unfavorable lease, which will be amortized over a period of 169 months. Of the acquired goodwill relating to Barneys, approximately $83.1 million will be deductible for tax purposes.

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NEW ACCOUNTING STANDARDS

    In November 2004, the FASB issued SFAS No. 151, "Inventory Costs," which clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) by requiring these items to be recognized as current-period charges. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005, with earlier application permitted. The adoption of SFAS No. 151 will have no impact on our results of operations or our financial position.

    In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets," which addresses the measurement of exchanges of nonmonetary assets and eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets and replaces it with an exception for exchanges that do not have commercial substance. SFAS No. 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005, with earlier application permitted. The adoption of SFAS No. 153 will have no impact on our results of operations or our financial position.

    In December 2004, the FASB issued a revision of SFAS No. 123, "Share-Based Payment" (hereinafter referred to as "SFAS No. 123R"), which requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. This Statement establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair-value-based measurement method in accounting for share-based payment transactions with employees except for equity instruments held by employee share ownership plans. This Statement was to be effective as of the beginning of the first interim or annual reporting period that begins after June 15, 2005; however, the SEC announced a new rule on April 14, 2005 that allows companies to implement Statement No. 123R at the beginning of their next fiscal year, instead of the next reporting period, that begins after June 15, 2005. We will adopt SFAS No. 123R on January 1, 2006 using the modified prospective application option. As a result, the compensation cost for the portion of awards we granted before January 1, 2006 for which the requisite service has not been rendered and that are outstanding as of January 1, 2006 will be recognized as the remaining requisite service is rendered. The adoption of SFAS No. 123R will not have a material effect on our results of operations or our financial position.

SUPPLEMENTAL SUMMARIZED FINANCIAL INFORMATION

    Certain of our subsidiaries function as co-issuers, obligors and co-obligors (fully and unconditionally guaranteed on a joint and several basis) of the outstanding debt of Jones Apparel Group, Inc. ("Jones"), including Jones Apparel Group USA, Inc. ("Jones USA"), Jones Apparel Group Holdings, Inc. ("Jones Holdings"), Nine West and Jones Retail Corporation ("Jones Retail")(collectively, including Jones, the "Issuers").

    Jones and Jones Holdings function as either co-issuers or co-obligors with respect to the outstanding debt securities of Jones USA and the outstanding debt securities of Nine West. In addition, Nine West and Jones Retail function as either a co-issuer or co-obligor with respect to all of Jones USA's outstanding debt securities, and Jones USA functions as a co-obligor with respect to the outstanding debt securities of Nine West as to which Jones and Jones Holdings function as co-obligors.

    The following condensed consolidating balance sheets, statements of income and statements of cash flows for the Issuers and our other subsidiaries have been prepared using the equity method of accounting in accordance with the requirements for presentation of such information. Separate financial statements and other disclosures concerning Jones are not presented as Jones has no independent operations or assets. There are no contractual restrictions on distributions from Jones USA, Jones Holdings, Nine West or Jones Retail to Jones.

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Condensed Consolidating Balance Sheets
(In millions)

		April 2, 2005				December 31, 2004
		Issuers	Others	Eliminations	Cons- olidated	Issuers	Others	Eliminations	Cons- olidated
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents	$ 13.2	$ 32.2	$ -	$ 45.4	$ 12.3	$ 32.7	$ -	$ 45.0
	Accounts receivable - net	304.2	376.4	-	680.6	174.6	273.7	-	448.3
	Inventories	287.6	365.0	(6.8)	645.8	294.3	373.2	(3.3)	664.2
	Prepaid and refundable income taxes	1.4	6.7	(8.1)	-	1.5	24.9	(26.4)	-
	Deferred taxes	24.6	38.4	(0.2)	62.8	23.5	46.0	(1.3)	68.2
	Prepaid expenses and other current assets	38.7	34.8	-	73.5	37.9	32.6	-	70.5
	TOTAL CURRENT ASSETS	669.7	853.5	(15.1)	1,508.1	544.1	783.1	(31.0)	1,296.2
Property, plant and equipment - net		124.6	176.4	-	301.0	125.3	178.2	0.1	303.6
Due from affiliates		105.9	522.5	(628.4)	-	116.5	511.3	(627.8)	-
Goodwill		1,777.1	347.5	-	2,124.6	1,776.0	349.0	-	2,125.0
Other intangibles - net		168.0	623.5	-	791.5	167.7	600.5	-	768.2
Investments in subsidiaries		2,169.9	-	(2,169.9)	-	2,110.4	-	(2,110.4)	-
Other assets		33.6	25.0	(1.9)	56.7	35.5	24.7	(2.4)	57.8
		$ 5,048.8	$ 2,548.4	$ (2,815.3)	$ 4,781.9	$ 4,875.5	$ 2,446.8	$ (2,771.5)	$ 4,550.8
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
	Short-term borrowings	$ 196.5	$ -	$ -	$ 196.5	$ 69.2	$ -	$ -	$ 69.2
	Current portion of long-term debt and capital lease obligations	132.2	1.3	-	133.5	132.5	1.5	-	134.0
	Accounts payable	104.1	162.0	-	266.1	105.9	153.4	-	259.3
	Income taxes payable	51.7	42.6	(16.0)	78.3	47.5	9.6	(33.4)	23.7
	Deferred taxes	-	0.2	(0.2)	-	-	-	-	-
	Accrued expenses and other current liabilities	90.7	80.8	-	171.5	93.3	104.4	-	197.7
	TOTAL CURRENT LIABILITIES	575.2	286.9	(16.2)	845.9	448.4	268.9	(33.4)	683.9
NONCURRENT LIABILITIES:
	Long-term debt	973.8	3.3	-	977.1	973.7	3.3	-	977.0
	Obligations under capital leases	13.7	25.6	-	39.3	14.1	25.5	-	39.6
	Deferred taxes	21.8	115.7	4.5	142.0	23.6	109.0	2.4	135.0
	Due to affiliates	522.5	105.9	(628.4)	-	511.3	116.5	(627.8)	-
	Other	26.9	55.1	-	82.0	24.7	28.1	8.6	61.4
	TOTAL NONCURRENT LIABILITIES	1,558.7	305.6	(623.9)	1,204.4	1,547.4	282.4	(616.8)	1,213.0
	TOTAL LIABILITIES	2,133.9	592.5	(640.1)	2,086.3	1,995.8	551.3	(650.2)	1,896.9
STOCKHOLDERS' EQUITY:
	Common stock and additional paid-in capital	1,251.7	1,769.8	(1,769.8)	1,251.7	1,237.9	1,779.9	(1,779.9)	1,237.9
	Retained earnings	2,498.3	180.8	(400.1)	2,279.0	2,430.0	110.6	(336.4)	2,204.2
	Accumulated other comprehensive income (loss)	(0.8)	5.3	(5.3)	(0.8)	0.8	5.0	(5.0)	0.8
	Treasury stock	(834.3)	-	-	(834.3)	(789.0)	-	-	(789.0)
	TOTAL STOCKHOLDERS' EQUITY	2,914.9	1,955.9	(2,175.2)	2,695.6	2,879.7	1,895.5	(2,121.3)	2,653.9
		$ 5,048.8	$ 2,548.4	$ (2,815.3)	$ 4,781.9	$ 4,875.5	$ 2,446.8	$ (2,771.5)	$ 4,550.8

Condensed Consolidating Statements of Income
(In millions)

		Fiscal Quarter Ended April 2, 2005				Fiscal Quarter Ended April 3, 2004
		Issuers	Others	Eliminations	Cons- olidated	Issuers	Others	Eliminations	Cons- olidated
Net sales		$ 625.1	$ 731.0	$ (21.0)	$ 1,335.1	$ 588.7	$ 634.4	$ (18.1)	$ 1,205.0
Licensing income (net)		-	14.2	-	14.2	-	13.1	-	13.1
	Total revenues	625.1	745.2	(21.0)	1,349.3	588.7	647.5	(18.1)	1,218.1
Cost of goods sold		377.3	485.5	(12.2)	850.6	334.5	430.2	(8.2)	756.5
	Gross profit	247.8	259.7	(8.8)	498.7	254.2	217.3	(9.9)	461.6
Selling, general and administrative expenses		194.3	150.5	(4.4)	340.4	195.8	104.6	(0.7)	299.7
	Operating income	53.5	109.2	(4.4)	158.3	58.4	112.7	(9.2)	161.9
Net interest expense (income) and financing costs		19.8	(0.9)	-	18.9	12.0	(0.3)	-	11.7
Equity in earnings of unconsolidated affiliates		0.1	0.3	0.5	0.9	1.2	0.2	(0.6)	0.8
	Income before provision for income taxes and equity in earnings of subsidiaries	33.8	110.4	(3.9)	140.3	47.6	113.2	(9.8)	151.0
Provision for income taxes		14.6	40.2	(1.5)	53.3	20.1	35.8	0.7	56.6
Equity in earnings of subsidiaries		61.3	-	(61.3)	-	75.8	-	(75.8)	-
	Net income	$ 80.5	$ 70.2	$ (63.7)	$ 87.0	$ 103.3	$ 77.4	$ (86.3)	$ 94.4

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Condensed Consolidating Statements of Cash Flows
(In millions)

		Fiscal Quarter Ended April 2, 2005				Fiscal Quarter Ended April 3, 2004
		Issuers	Others	Eliminations	Cons- olidated	Issuers	Others	Eliminations	Cons- olidated
Net cash provided by (used in) operating activities		$ (67.0)	$ 8.8	$ -	$ (58.2)	$ (59.3)	$ (24.0)	$ -	$ (83.3)
Cash flows from investing activities:
	Capital expenditures	(7.8)	(9.8)	-	(17.6)	(6.5)	(7.0)	-	(13.5)
	Payments relating to acquisitions	(4.1)	-	-	(4.1)	(37.8)	-	-	(37.8)
	Other (net)	-	0.1	-	0.1	-	-	-	-
	Net cash used in investing activities	(11.9)	(9.7)	-	(21.6)	(44.3)	(7.0)	-	(51.3)
Cash flows from financing activities:
	Net borrowings under credit facilities	127.2	-	-	127.2	295.5	-	-	295.5
	Redemption of Zero Coupon Convertible Senior Notes	-	-	-	-	(446.6)	-	-	(446.6)
	Debt issuance costs	(0.4)	-	-	(0.4)	-	-	-	-
	Principal payments on capital leases	(0.8)	(0.5)	-	(1.3)	(1.0)	(0.5)	-	(1.5)
	Purchases of treasury stock	(42.3)	-	-	(42.3)	(41.1)	-	-	(41.1)
	Dividends paid	(12.2)	-	-	(12.2)	(10.1)	-	-	(10.1)
	Proceeds from exercise of employee stock options	8.3	-	-	8.3	20.3	-	-	20.3
	Net cash provided by (used in) financing activities	79.8	(0.5)	-	79.3	(183.0)	(0.5)	-	(183.5)
Effect of exchange rates on cash		-	0.9	-	0.9	-	-	-	-
Net increase (decrease) in cash and cash equivalents		0.9	(0.5)	-	0.4	(286.6)	(31.5)	-	(318.1)
Cash and cash equivalents, beginning		12.3	32.7	-	45.0	302.0	48.0	-	350.0
Cash and cash equivalents, ending		$ 13.2	$ 32.2	$ -	$ 45.4	$ 15.4	$ 16.5	$ -	$ 31.9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

    The following discussion provides information and analysis of our results of operations for the 13 weeks ended April 2, 2005 (hereinafter referred to as the "first fiscal quarter of 2005") and the 14 weeks ended April 3, 2004 (hereinafter referred to as the "first fiscal quarter of 2004"), and our liquidity and capital resources. The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements included elsewhere herein.

Overview

    We design, contract for the manufacture of, manufacture and market a broad range of women's collection sportswear, suits and dresses, casual sportswear and jeanswear for men, women and children, and women's and children's footwear and accessories. We sell our products through a broad array of distribution channels, including better specialty and department stores and mass merchandisers, primarily in the United States and Canada. We also operate our own network of retail and factory outlet stores. In addition, we license the use of several of our brand names to select manufacturers and distributors of women's and men's apparel and accessories worldwide.

Acquisitions

    We completed our acquisitions of Maxwell on July 8, 2004 and Barneys on December 20, 2004. The results of operations of the acquired companies are included in our operating results from the respective dates of acquisition. Accordingly, the financial position and results of operations presented and discussed herein are not directly comparable between years. Maxwell operates in the wholesale footwear and accessories segment and Barneys operates in the retail segment.

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Stock-Based Compensation

    Effective January 1, 2003, we adopted the fair value method of accounting for employee stock options for all options granted after December 31, 2002 pursuant to the guidelines contained in SFAS No. 123, "Accounting for Stock-Based Compensation" using the "prospective method" set forth in SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure." Under this approach, the fair value of the option on the date of grant (as determined by the Black-Scholes-Merton option pricing model) is amortized to compensation expense over the option's vesting period. Prior to January 1, 2003, pursuant to a provision in SFAS No. 123 we had elected to continue using the intrinsic-value method of accounting for stock options granted to employees in accordance with Accounting Principles Board Opinion 25, "Accounting for Stock Issued to Employees." Accordingly, compensation cost for stock options had been measured as the excess, if any, of the quoted market price of our stock at the date of the grant over the amount the employee must pay to acquire the stock. Under this approach, we had only recognized compensation expense for stock-based awards to employees for options granted at below-market prices.

    In December 2004, the FASB issued a revision of SFAS No. 123, "Share-Based Payment," which requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. We will adopt SFAS No. 123R on January 1, 2006 using the modified prospective application option. As a result, the compensation cost for the portion of awards we granted before January 1, 2006 for which the requisite service has not been rendered and that are outstanding as of January 1, 2006 will be recognized as the remaining requisite service is rendered. The adoption of SFAS No. 123R will not have a material effect on our results of operations or our financial position.

CRITICAL ACCOUNTING POLICIES

    Several of our accounting policies involve significant judgements and uncertainties. The policies with the greatest potential effect on our results of operations and financial position include the estimated collectibility of accounts receivable, the recovery value of obsolete or overstocked inventory and the estimated fair values of both our goodwill and intangible assets with indefinite lives.

    For accounts receivable, we estimate the net collectibility, considering both historical and anticipated trends of trade discounts and co-op advertising deductions taken by our customers, allowances we provide to our retail customers to flow goods through the retail channels, and the possibility of non-collection due to the financial position of our customers. For inventory, we estimate the amount of goods that we will not be able to sell in the normal course of business and write down the value of these goods to the recovery value expected to be realized through off-price channels. Historically, actual results in these areas have not been materially different than our estimates, and we do not anticipate that our estimates and assumptions are likely to materially change in the future. However, if we incorrectly anticipate trends or unexpected events occur, our results of operations could be materially affected.

    We utilize independent third-party appraisals to estimate the fair values of both our goodwill and our intangible assets with indefinite lives. These appraisals are based on projected cash flows and interest rates; should interest rates or our future cash flows differ significantly from the assumptions used in these projections, material impairment losses could result where the estimated fair values of these assets become less than their carrying amounts.

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RESULTS OF OPERATIONS

    Statements of Income Stated in Dollars and as a Percentage of Total Revenues

(In millions)	Fiscal Quarter Ended
	April 2, 2005		April 3, 2004
Net sales	$ 1,335.1	98.9%	$ 1,205.0	98.9%
Licensing income (net)	14.2	1.1%	13.1	1.1%
Total revenues	1,349.3	100.0%	1,218.1	100.0%
Cost of goods sold	850.6	63.0%	756.5	62.1%
Gross profit	498.7	37.0%	461.6	37.9%
Selling, general and administrative expenses	340.4	25.2%	299.7	24.6%
Operating income	158.3	11.7%	161.9	13.3%
Net interest expense	18.9	1.4%	11.7	1.0%
Equity in earnings of unconsolidated affiliates	0.9	0.1%	0.8	0.1%
Income before provision for income taxes	140.3	10.4%	151.0	12.4%
Provision for income taxes	53.3	4.0%	56.6	4.6%
Net income	$ 87.0	6.4%	$ 94.4	7.7%

Percentage totals may not add due to rounding.

Fiscal Quarter Ended April 2, 2005 Compared to Fiscal Quarter Ended April 3, 2004

    Revenues. Total revenues for the first fiscal quarter of 2005 were $1.35 billion compared to $1.22 billion for the first fiscal quarter of 2004, an increase of 10.8%.

    Revenues by segment were as follows:

(In millions)	First Fiscal Quarter of 2005	First Fiscal Quarter of 2004	Increase/ (Decrease)	Percent  Change
Wholesale better apparel	$ 428.7	$ 409.1	$19.6	4.8%
Wholesale moderate apparel	355.1	395.3	(40.2)	(10.2%)
Wholesale footwear and accessories	267.7	230.8	36.9	16.0%
Retail	283.6	169.8	113.8	67.0%
Other	14.2	13.1	1.1	8.4%
Total revenues	$ 1,349.3	$ 1,218.1	$ 131.2	10.8%

    Wholesale better apparel revenues increased primarily as a result of increased shipping in our Jones New York Sport, Polo Jeans Company and Nine West apparel product lines as well as initial shipments of our AK Sport and Nipon Boutique product lines, which were launched in the third quarter of last year. These increases were partially offset by decreased shipping in our Kasper, LeSuit, and Jones New York Dress product lines, as well as decreased shipping in Jones New York Signature as compared to the prior period (partially due to the initial floor setup for the launch of the line in the prior period).

    Wholesale moderate apparel revenues decreased primarily as a result of a reduction in shipping of our Norton McNaughton, Erika, Evan-Picone and l.e.i. product lines. These reductions were partially offset by increases in our Gloria Vanderbilt, Nine & Company and Bandolino product lines as well as initial shipments of our Pappagallo and Rena Rowan product lines and the W private label product line, as well as shipments of our A|Line product line, which launched in the third quarter of 2004.

    Wholesale footwear and accessories revenues increased primarily due to the product lines added as a result of the Maxwell acquisition ($60.1 million) as well as an increase in our international footwear and accessories business, which was partially offset by decreases in our Nine West footwear, Nine West accessories and Easy Spirit footwear product lines.

- 18 -

    Retail revenues increased primarily as the result of $120.6 million in sales from the locations added as a result of the Barneys acquisition, partially offset by a 3.7% decrease in comparable footwear and accessories store and apparel store sales. We began the first fiscal quarter of 2005 with 1,037 retail locations and had a net decrease of six locations during the quarter to end the quarter with 1,031 locations.

    Gross Profit. The gross profit margin decreased to 37.0% in the first fiscal quarter of 2005 compared to 37.9% in the first fiscal quarter of 2004.

    Wholesale better apparel gross profit margins were 36.7% and 37.1% for the first fiscal quarters of 2005 and 2004, respectively. The decrease was a result of lower margins in our Kasper business due to higher off-price sales. This decrease was partially offset by a higher margin realized in our Polo Jeans Company business as a result of higher full-price selling to major department store customers.

    Wholesale moderate apparel gross profit margins were 27.9% and 28.5% for the first fiscal quarters of 2005 and 2004, respectively. The decrease was a result of a lower margin in our l.e.i. business primarily due to excess capacity being absorbed by a reduced sales base and additional product costs that were not passed through to the customer.

    Wholesale footwear and accessories gross profit margins were 32.0% and 36.2% for the first fiscal quarters of 2005 and 2004, respectively. The decrease was primarily the result of a lower margin in our domestic wholesale footwear and accessories business due to higher sales to off-price retailers and the lower margins generated by the acquired Maxwell brands.

    Retail gross profit margins were 49.9% and 52.3% for the first fiscal quarters of 2005 and 2004, respectively. The decrease was primarily the result of the effects of the addition of the acquired Barneys retail locations, which generate lower margins than the historical segment average, partially offset by an increase in the gross margin related to our Canadian retail operations.

    Selling, General and Administrative Expenses. Selling, general and administrative expenses of $340.4 million in the first fiscal quarter of 2005 represented an increase of $40.7 million from the $299.7 million reported for the first fiscal quarter of 2004. In the first fiscal quarter of 2005, Barneys added $47.6 million to the retail segment, which includes $0.2 million of amortization of acquired intangible assets and unfavorable leases. The prior period included an $8.4 million writeoff of unamortized bond discounts and debt issue costs in the wholesale better apparel segment resulting from the redemption of all of our outstanding Zero Coupon Convertible Senior Notes due 2021.

    Operating Income. The resulting operating income for the first fiscal quarter of 2005 of $158.3 million decreased $3.6 million from the $161.9 million for the first fiscal quarter of 2004, due to the factors described above.

    Net Interest Expense. Net interest expense was $18.9 million in the first fiscal quarter of 2005 compared to $11.7 million in the first fiscal quarter of 2004. The increase was primarily the result of interest related to $750 million of Senior Notes that were issued in November 2004.

    Provision for Income Taxes. The effective income tax rate was 38.0% for the first fiscal quarter of 2005 and 37.5% for the first fiscal quarter of 2004. The difference was primarily driven by a higher state tax rate as a result of the Barneys acquisition.

    Net Income and Earnings Per Share. Net income was $87.0 million in the first fiscal quarter of 2005, a decrease of $7.4 million from the net income of $94.4 million earned in the first fiscal quarter of 2004. Diluted earnings per share for the first fiscal quarter of 2005 was $0.71 compared to $0.73 for the first fiscal quarter of 2004, on 5.7% fewer shares outstanding.

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LIQUIDITY AND CAPITAL RESOURCES

    Our principal capital requirements have been to fund acquisitions, pay dividends, working capital needs, capital expenditures and repurchases of our common stock on the open market. We have historically relied on internally generated funds, trade credit, bank borrowings and the issuance of notes to finance our operations and expansion. As of April 2, 2005, total cash and cash equivalents were $45.4 million, an increase of $0.4 million from the $45.0 million reported as of December 31, 2004.

    Operating activities used $58.2 million and $83.3 million in the first fiscal quarters of 2005 and 2004, respectively. The difference was primarily due to a smaller increase in accounts receivable (primarily due to lower accounts receivable in our wholesale moderate apparel segment related to the decrease in sales) and an increase in accounts payable during the current period (primarily to support increased inventory in our Polo Jeans Company and Gloria Vanderbilt businesses) compared to a decrease during the prior period.

    Investing activities used $21.6 million and $51.3 million in the first fiscal quarters of 2005 and 2004, respectively. The difference was primarily due to payments relating to the Kasper acquisition in the prior period.

    Financing activities provided $79.3 million in the first fiscal quarter of 2005. Borrowings under our Senior Credit Facilities were offset by repurchases of our common stock and the payment of dividends to our common shareholders.

    Financing activities used $183.5 million in the first fiscal quarter of 2004. The primary uses of cash were to redeem our outstanding Zero Coupon Notes and 7.50% Senior Notes due 2004, repurchase our common stock and pay dividends to our common shareholders.

    On February 2, 2004, we redeemed all of our outstanding Zero Coupon Notes at a redemption price (inclusive of issue price plus accrued original issue discount) of $554.41 per $1,000 of principal amount at maturity for a total payment of $446.6 million, which was financed primarily through our Senior Credit Facilities. As a result of this transaction, we recorded a charge of $8.4 million in the first fiscal quarter of 2004, representing the writeoff of unamortized bond discounts and debt issuance costs. The securities carried a 3.5% yield to maturity with a face value of $805.6 million ($1,000 per note) and were convertible into common stock at a conversion rate of 9.8105 shares per note.

    We repurchased $45.3 million of our common stock on the open market during the first fiscal quarter of 2005 (of which $3.0 million was accrued at April 2, 2005) and $34.5 million during the first fiscal quarter of 2004. As of April 2, 2005, a total of $903.9 million had been expended under announced programs to acquire up to $1.0 billion of such shares. On May 5, 2005, we announced that our Board of Directors had authorized an additional $150.0 million of share repurchases, bringing the aggregate total to $1.15 billion under our repurchase programs. We may make additional share repurchases in the future depending on, among other things, market conditions and our financial condition. Proceeds from the issuance of common stock to our employees exercising stock options amounted to $8.3 million and $20.3 million in the first fiscal quarters of 2005 and 2004, respectively.

    At April 2, 2005, we had credit agreements with several lending institutions to borrow an aggregate principal amount of up to $1.5 billion under Senior Credit Facilities. These facilities, of which the entire amount is available for letters of credit or cash borrowings, provide for a $500.0 million three-year revolving credit facility that expires in June 2006 and a $1.0 billion five-year revolving credit facility that expires in June 2009. At April 2, 2005, $46.5 million in cash borrowings were outstanding under the three-year credit facility and $470.1 million was outstanding under the five-year credit facility (comprised of $150.0 million in cash borrowings and $320.1 million in outstanding letters of credit). Borrowings under the Senior Credit Facilities may also be used for working capital and other general corporate purposes, including permitted acquisitions and stock repurchases. The Senior Credit Facilities are unsecured and require us to satisfy both a coverage ratio of earnings before interest, taxes, depreciation, amortization and rent to interest expense plus rents and a net worth maintenance covenant, as well as other restrictions, including (subject to exceptions) limitations on our ability to incur additional indebtedness, prepay subordinated indebtedness, make acquisitions, enter into mergers and pay dividends. We plan to replace the $500.0 million three-year credit facility with a similar five-year credit facility during the second quarter of 2005.

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    At April 2, 2005, we also had a C$10.0 million unsecured line of credit in Canada, under which no amounts were outstanding.

    On May 5, 2005, we announced that the Board of Directors had declared a quarterly cash dividend of $0.10 per share to all common stockholders of record as of May 20, 2005 for payment on June 3, 2005.

    We have two joint ventures with HCL Technologies Limited to provide us with computer consulting, programming and associated support services. As of April 2, 2005, we have committed to purchase $10.5 million in services from these joint venture companies through June 30, 2007.

    We also have a joint venture with Sutton Developments Pty. Ltd. ("Sutton") to operate retail locations in Australia. We have unconditionally guaranteed up to $7.0 million of borrowings under the joint venture's uncommitted credit facility and up to $0.4 million of presettlement risk associated with foreign exchange transactions. Sutton is required to reimburse us for 50% of any payments made under these guarantees. At April 2, 2005, the outstanding balance subject to these guarantees was approximately $0.8 million.

    We believe that funds generated by operations, proceeds from the issuance of notes, the Senior Credit Facilities and the Canadian line of credit will provide the financial resources sufficient to meet our foreseeable working capital, dividend, capital expenditure and stock repurchase requirements and fund our contractual obligations and our contingent liabilities and commitments.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

    The market risk inherent in our financial instruments represents the potential loss in fair value, earnings or cash flows arising from adverse changes in interest rates or foreign currency exchange rates. We manage this exposure through regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. Our policy allows the use of derivative financial instruments for identifiable market risk exposures, including interest rate and foreign currency fluctuations. We do not enter into derivative financial contracts for trading or other speculative purposes.

    The primary interest rate exposures on floating rate financing arrangements are with respect to United States and Canadian short-term interest rates. We had approximately $1.5 billion in variable rate credit facilities at April 2, 2005.

    We are exposed to market risk related to changes in foreign currency exchange rates. We have assets and liabilities denominated in certain foreign currencies and purchase products from foreign suppliers who require payment in funds other than the U.S. Dollar. At April 2, 2005, we had outstanding foreign exchange contracts to exchange Canadian Dollars for a total of US$5.0 million through June 2005, US$23.9 million for Euros through March 2006 and US$0.8 million for British Pounds through January 2006. We believe that these financial instruments should not subject us to undue risk due to foreign exchange movements because gains and losses on these contracts should offset losses and gains on the assets, liabilities, and transactions being hedged. We are exposed to credit-related losses if the counterparty to a financial instrument fails to perform its obligation. However, we do not expect the counterparties, which presently have high credit ratings, to fail to meet their obligations.

    For further information see "Derivatives" in the Notes to Consolidated Financial Statements.

Item 4. Controls and Procedures

    As required by Exchange Act Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our President and Chief Executive Officer and our Chief Operating and Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon this evaluation, our President and Chief Executive Officer and our Chief Operating and Financial Officer concluded that both our disclosure controls and procedures and our internal controls and procedures are effective in timely alerting them to material information required to be included in

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our periodic SEC filings and that information required to be disclosed by us in these periodic filings is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that our internal controls are effective to provide reasonable assurance that our financial statements are fairly presented in conformity with generally accepted accounting principles.

    There have been no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. As described in our annual report filed on Form 10-K/A (Amendment No. 1) for the year ended December 31, 2004, we excluded Barneys, which was acquired on December 20, 2004, from our internal control testing and evaluation.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

    In October 1995, we acquired an exclusive license to manufacture and market women's shirts, blouses, skirts, jackets, suits, sweaters, pants, vests, coats, outerwear and hats under the Lauren by Ralph Lauren ("Lauren") trademark in the United States, Canada and Mexico pursuant to license and design service agreements with Polo (collectively, the "Lauren License"), which were to expire on December 31, 2006. In May 1998, we acquired an exclusive license to manufacture and market women's dresses, shirts, blouses, skirts, jackets, suits, sweaters, pants, vests, coats, outerwear and hats under the Ralph by Ralph Lauren ("Ralph") trademark in the United States, Canada and Mexico pursuant to license and design service agreements with Polo (the "Ralph License"). The Ralph License was scheduled to end on December 31, 2003.

    During the course of the discussions concerning the Ralph License, Polo asserted that the expiration of the Ralph License would cause the Lauren License agreements to end on December 31, 2003, instead of December 31, 2006. We believe that this is an improper interpretation and that the expiration of the Ralph License did not cause the Lauren License to end.

    On June 3, 2003, we announced that our discussions with Polo regarding the interpretation of the Lauren License had reached an impasse and that, as a result, we had filed a complaint in the New York State Supreme Court against Polo and its affiliates and our former President, Jackwyn Nemerov. The complaint alleges that Polo breached the Lauren License agreements by claiming that the license ends at the end of 2003. The complaint also alleges that Ms. Nemerov breached the confidentiality and non-compete provisions of her employment agreement with us. Additionally, Polo is alleged to have induced Ms. Nemerov to breach her employment agreement and Ms. Nemerov is alleged to have induced Polo to breach the Lauren License agreements. We asked the court to enter a judgment for compensatory damages of $550 million, as well as punitive damages, and to enforce the confidentiality and non-compete provisions of Ms. Nemerov's employment agreement. On June 3, 2003, Polo also filed a complaint in the New York State Supreme Court against us, seeking among other things a declaratory judgment that the Lauren License terminated as of December 31, 2003. On June 25, 2003, we filed an amended complaint adding a claim against Ms. Nemerov for conversion, which alleges that Ms. Nemerov wrongfully took and possesses documents containing confidential information regarding us.

    On July 3, 2003, Ms. Nemerov filed a motion to stay our claims against her and to compel arbitration of those claims. We opposed that motion. Additionally, on July 3, 2003, Polo served a motion on us to dismiss our breach of contract claim, and to stay our claim regarding inducement of Ms. Nemerov's breach of her employment agreement pending the outcome of arbitration. On July 8, 2003, we served papers opposing Nemerov's motion. On July 23, 2003, we served papers opposing Polo's motion and also served upon Polo a motion seeking summary judgment in Polo's action for a declaratory judgment. On August 12, 2003, Polo filed a cross-motion for summary judgment in that action.

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    On March 15, 2004, the Court issued a decision resolving the motions. The Court denied Polo's motion to dismiss our breach of contract claim, granted our motion for summary judgment in Polo's action for a declaratory judgment, and denied Polo's cross-motion for summary judgment in the same action. As a result, the Court dismissed Polo's action for a declaratory judgment and entered judgment in our favor in that action, while permitting our action against Polo to proceed.

    The Court also denied Nemerov's motion to compel arbitration of our claim against her for inducing Polo to breach the Lauren Agreements, but granted her motion to compel arbitration of our remaining claims against her. The Court granted Polo's motion for a stay of proceedings relating to our claim against Polo for inducing Nemerov to breach her employment agreement while those claims are arbitrated by us and Nemerov. We dismissed our claims against Nemerov in the litigation and are pursuing our claims against her in the arbitration.

    Polo appealed from the rulings against it. In addition, Polo filed a motion for leave to reargue and to renew its previous motions to dismiss and for summary judgment, which we opposed. On May 19, 2004, the New York State Supreme Court heard oral argument on Polo's motion. On August 16, 2004, the court denied Polo's motions to reargue and renew its previous motions. Polo appealed from this ruling. On March 4, 2005, the Appellate Court heard oral argument. On March 24, 2005, the Appellate Division, First Department of the Supreme Court unanimously affirmed the trial court's orders.

    On May 12, 2004, we initiated a Demand for Arbitration with the American Arbitration Association against Ms. Nemerov. The demand alleges Ms. Nemerov breached her employment agreement with us, violated her fiduciary duties and converted our property. Ms. Nemerov has denied these allegations and asserted counterclaims for defamation and breach of the non-disparagement and indemnification clauses of her employment agreement. On August 24, 2004, we amended our demand to add a claim for misappropriation of trade secrets. Ms. Nemerov continues to deny our claims and to pursue her counterclaims.

    We have been named as a defendant in various actions and proceedings arising from our ordinary business activities. Although the amount of any liability that could arise with respect to these actions cannot be accurately predicted, in our opinion, any such liability will not have a material adverse financial effect on us.

Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities

    The following table sets forth the repurchases of our common stock for the fiscal quarter ended April 2, 2005.

Issuer Purchases of Equity Securities

Period	(a) Total Number of Shares (or Units) Purchased	(b) Average Price Paid per Share (or Unit)	(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
January 1, 2005 to January 29, 2005	125,000	$33.00	125,000	$137,252,382
January 30, 2005 to February 26, 2005	645,000	$33.52	645,000	$115,634,275
February 27, 2005 to  April 2, 2005	595,000	$32.80	595,000	$96,118,771
Total	1,365,000	$33.16	1,365,000	$96,118,771

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    These repurchases were made under programs announced on July 27, 2004 and October 27, 2004 for $100.0 million each. While neither plan has an expiration date, the $100.0 limit under the July 27, 2004 program was reached during April 2005.

Item 5. Other information

Statement Regarding Forward-looking Disclosure

    This Report includes, and incorporates by reference, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding our expected financial position, business and financing plans are forward-looking statements. The words "believes," "expects," "plans," "intends," "anticipates" and similar expressions identify forward-looking statements. Forward-looking statements also include representations of our expectations or beliefs concerning future events that involve risks and uncertainties, including:

• those associated with the effect of national and regional economic conditions;
• lowered levels of consumer spending resulting from a general economic downturn or lower levels of consumer confidence or generally reduced shopping activity caused by public safety concerns;
• the performance of our products within the prevailing retail environment;
• customer acceptance of both new designs and newly-introduced product lines;
• our reliance on a few department store groups for large portions of our business;
• consolidation of our retail customers;
• financial difficulties encountered by customers;
• the effects of vigorous competition in the markets in which we operate;
• our ability to identify acquisition candidates and acquire such businesses on reasonable financial and other terms, in an increasingly competitive environment for such acquisitions;
• the integration of the organizations and operations of any acquired businesses into our existing organization and operations;
• our reliance on independent foreign manufacturers;
• changes in the costs of raw materials, labor and advertising;
• the general inability to obtain higher wholesale prices for our products that we have experienced for many years;
• the uncertainties of sourcing associated with the new environment in which quota has been eliminated on apparel products while political pressure is building for the re-imposition of quotas in certain categories; and
• our ability to secure and protect trademarks and other intellectual property rights.

    All statements other than statements of historical facts included in this Report, including, without limitation, the statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations," are forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such expectations may prove to be incorrect. Important factors that could cause actual results to differ materially from our expectations ("Cautionary Statements") are disclosed in this Report in conjunction with the forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Cautionary Statements.

Item 6. Exhibits

    See Exhibit Index.

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SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

JONES APPAREL GROUP, INC.
(Registrant)

Date: May 5, 2005 By          /s/ Peter Boneparth
PETER BONEPARTH
 Chief Executive Officer

By         /s/ Wesley R. Card 
WESLEY R. CARD
Chief Operating and Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description of Exhibit
10.1*	Form of Agreement Evidencing Restricted Stock Awards for Outside Directors Under the 1999 Stock Incentive Plan.+
10.2*	Form of Agreement Evidencing Restricted Stock Awards Under the 1999 Stock Incentive Plan.+
31*	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32o	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

____________
* Filed herewith.
^o Furnished herewith.
⁺ Management contract or compensatory plan or arrangement.

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EX-10

EXHIBIT 10.1

JONES APPAREL GROUP, INC.

RESTRICTED STOCK AGREEMENT
(Outside Director)

    THIS AGREEMENT dated as of ______________, 20__, between JONES APPAREL GROUP, INC., a Pennsylvania corporation (the "Company") and the person identified on Annex I attached hereto (the "Grantee").

    The Company has adopted a 1999 Stock Incentive Plan (the "Plan"). The Plan, as it has been amended to date and may hereafter be amended and continued, is incorporated herein by reference and made part of this Agreement.

    The Committee, which is charged with the administration of the Plan pursuant to Section 3 thereof, has determined that it would be to the advantage and in the interest of the Company to grant the award provided for herein to the Grantee as a portion of the compensation due to the Grantee for service as a member of the Board of Directors of the Company (the "Board") or any committee of the Board.

    In consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties hereto agree as follows:

    1. Grant of Restricted Shares.

        (a) Subject to the provisions of this Agreement and to the provisions of the Plan, the Company hereby grants to the Grantee that number of shares of restricted Common Stock of the Company, par value $.01 per share, set forth on Annex I attached hereto (the "Restricted Shares"). Subject to Section 3, certificates evidencing the Restricted Shares shall be issued by the Company and registered in the name of the Grantee on the stock transfer books of the Company. However, certificates issued with respect to Restricted Shares shall be held by the Company in escrow under the terms hereof. Such certificates shall bear the legend set forth in subsection (c) below or such other appropriate legend as the Committee shall determine, which legend shall be removed only if and when the Restricted Shares vest as provided herein, at which time the certificates shall be delivered to the Grantee. Upon the issuance of Restricted Shares hereunder, the Grantee shall be entitled to vote the Restricted Shares, and shall be entitled to receive, free of all restrictions, ordinary cash dividends and dividends in the form of shares thereon. The Grantee will not be required to return any such ordinary dividends to the Company in the event of forfeiture of such Restricted Shares. The Grantee's right to receive any extraordinary dividends or other distributions with respect to Restricted Shares prior to their becoming nonforfeitable shall be at the sole discretion of the Committee, but in the event of any such extraordinary event, the Committee shall take such action as is appropriate to preserve the value of, and prevent the unintended enhancement of the value of, the Restricted Shares.

        (b) In order to comply with any applicable securities laws, the Company may require the Grantee (i) to furnish evidence satisfactory to the Company (including a written and signed representation letter) to the effect that the Restricted Shares were acquired for investment only

and not for resale or distribution and (ii) to agree that the Restricted Shares shall only be sold by the Grantee following registration under the Securities Act of 1933, as amended, or pursuant to an exemption therefrom.

        (c) Unless otherwise determined by the Committee, any certificate issued in respect of the Restricted Shares prior to the lapse of any outstanding restrictions relating thereto shall bear the following legend:

The sale, transfer, alienation, attachment, assignment, pledge or encumbrance of the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the Jones Apparel Group, Inc. 1999 Stock Incentive Plan and an Agreement entered into by the registered owner and the Company dated as of __________________, 20__. Copies of such Plan and Agreement are on file at the offices of the Company. Any attempt to dispose of these shares in contravention of the applicable restrictions, including by way of sale, assignment, transfer, pledge, hypothecation or otherwise, shall be null and void and without effect."

    2. Vesting.

    Subject to Section 3 hereof, the restrictions on transfer of the Restricted Shares shall lapse and the Restricted Shares shall become vested and nonforfeitable as follows:

        (a) See Annex I attached hereto.

        (b) In the event (i) of the dissolution or liquidation of the Company, or (ii) a "change in control" (as defined in the Plan) of the Company has occurred or is about to occur, then, if the Committee shall so determine, any Restricted Shares not forfeited prior to the change in control shall become immediately and fully vested, and the Committee shall have sole discretion to waive automatic forfeitures, if any, arising from the change in control.

    3. Termination of Service as a Director.

    Except as provided in Paragraph 4 hereof, Restricted Shares shall not vest unless the Grantee is then a director of the Company and unless the Grantee has remained continuously a director of the Company since the date of grant of the Restricted Shares. In the event that the service of the Grantee as a director of the Company shall terminate (other than by reason of death or disability), all unvested Restricted Shares shall be forfeited and be immediately transferred to, and reacquired by, the Company at no cost to the Company.

    4. Acceleration of Benefits upon Death or Disability.

        If the Grantee shall (a) die while he or she is a director of the Company, or (b) become permanently and totally disabled within the meaning of Section 22(e)(3) of the Internal Revenue

2

Code of 1986, as amended, while serving as a director of the Company, then the period of restrictions applicable to all unvested Restricted Shares shall terminate on the date of termination of service as a director by reason of death or disability.

    5. Nontransferability of Restricted Shares.

    The Restricted Shares are not transferable and may not be sold, assigned, transferred, disposed of, pledged or otherwise encumbered by the Grantee, other than by will or the laws of descent and distribution until such Restricted Shares become nonforfeitable in accordance with the provisions of this Agreement. Any Grantee's successor (a "Successor") shall take rights herein granted subject to the terms and conditions hereof. No such transfer of the Restricted Shares to any Successor shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by such Successor of the terms and conditions hereof.

    6. Effect of Certain Changes.

    Notwithstanding any other provision of the Plan, in the event of a change in the outstanding Common Stock of the Company by reason of a stock dividend, split-up, split-down, reverse split, recapitalization, merger, consolidation, combination or exchange of shares, spin-off, reorganization, liquidation or the like, then the Committee may appropriately adjust the aggregate number of shares and class of shares subject to this award, whose determination shall be conclusive.

    7. Payment of Transfer Taxes, Fees, and Other Expenses.

    The Company agrees to pay any and all original issue taxes and stock transfer taxes that may be imposed on the issuance of the Restricted Shares acquired pursuant to this Agreement, together with any and all of the fees and expenses necessarily incurred by the Company in connection therewith.

    8. Other Restrictions.

    The vesting of each Restricted Share shall be subject to the requirement that, if at any time the Committee shall determine that (i) the listing, registration or qualification of the shares of Common Stock subject or related thereto upon any securities exchange or under any state of federal law, or (ii) the consent or approval of any government regulatory body, or (iii) an agreement by the Grantee with respect to the disposition of shares of Common Stock, is necessary or desirable as a condition of, or in connection with, such vesting, then in any such event, such vesting shall not be effective unless such listing, registration, qualification, consent, approval or agreement shall have been effected or obtained free of any conditions not acceptable to the Committee.

3

    9. Notices.

    Any notices to be given under the terms of this Agreement shall be in writing and addressed to the Company in care of its Chief Operating and Financial Officer, 250 Rittenhouse Circle, Bristol, Pennsylvania 19007, and any notice to the Grantee shall be addressed to him at his address now on file with the Company, or to such other address as either may last have designated to the other by notice as provided herein. Any notice so addressed shall be deemed to be given on the second business day after mailing, by registered or certified mail, at a post office or branch post office within the United States.

    10. Effect of Agreement.

    Except as otherwise provided hereunder, this Agreement shall be binding upon and shall inure to the benefit of any successor or successors of the Company.

    11. Laws Applicable to Construction.

    This Agreement has been granted, executed and delivered in the State of Pennsylvania, and the interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Pennsylvania, as applied to contracts executed in and performed wholly within the State of Pennsylvania.

    12. Conflicts and Interpretation.

    If there is any conflict between this Agreement and the Plan, or if there is any ambiguity in this Agreement, any term which is not defined in this Agreement, or any matter as to which this Agreement is silent, in any such case the Plan shall govern, including, without limitation, the provisions thereof pursuant to which the Committee has the power, among others, to (i) interpret the Plan, (ii) prescribe, amend and rescind rules and regulations relating to the Plan and (iii) make all other determinations deemed necessary or advisable for the administration of the Plan. In the event that any question or controversy shall arise with respect to the nature, scope or extent of any one or more rights conferred by this award, the determination by the Committee (as constituted at the time of such determination) of the rights of the Grantee shall be conclusive, final and binding upon the Grantee and upon any other person who shall assert any right pursuant to this award.

    13. Headings.

    The headings of paragraphs herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any of the provisions of this Agreement.

    14. Amendment.

    This Agreement may not be modified, amended or waived in any manner except by an instrument in writing signed by both parties hereto. The waiver by either party of compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other

4

provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.

    IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and the Grantee has hereunto set his hand.

JONES APPAREL GROUP, INC.

By: _________________________
      Ira M. Dansky
      Executive Vice President
 

GRANTEE:

____________________________
[Name]

5

ANNEX I

(Insert)

EX-10

EXHIBIT 10.2

JONES APPAREL GROUP, INC.
RESTRICTED STOCK AGREEMENT

    THIS AGREEMENT dated as of ______________, 20__ between JONES APPAREL GROUP, INC., a Pennsylvania corporation (the "Company") with the person executing this Agreement (the "Employee").

    The Company has adopted a 1999 Stock Incentive Plan (the "Plan"). The Plan, as it has been amended to date and may hereafter be amended and continued, is incorporated herein by reference and made part of this Agreement.

    The Committee, which is charged with the administration of the Plan pursuant to Section 3 thereof, has determined that it would be to the advantage and in the interest of the Company to grant the award provided for herein to the Employee as an inducement to remain in the service of the Company or one of its subsidiaries, and as an incentive for increased efforts during such service.

    In consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties hereto agree as follows:

    1. Grant of Restricted Shares.

        (a) Subject to the provisions of this Agreement and to the provisions of the Plan, the Company hereby grants to the Employee that number of shares of restricted Common Stock of the Company, par value $.01 per share, set forth on Annex I attached hereto (the "Restricted Shares"). Subject to Section 3, certificates evidencing the Restricted Shares shall be issued by the Company and registered in the name of the Employee on the stock transfer books of the Company. However, certificates issued with respect to Restricted Shares shall be held by the Company in escrow under the terms hereof. Such certificates shall bear the legend set forth in subsection (c) below or such other appropriate legend as the Committee shall determine, which legend shall be removed only if and when the Restricted Shares vest as provided herein, at which time the certificates shall be delivered to the Employee. Upon the issuance of Restricted Shares hereunder, the Employee shall be entitled to vote the Restricted Shares, and shall be entitled to receive, free of all restrictions, ordinary cash dividends and dividends in the form of shares thereon. The Employee will not be required to return any such ordinary dividends to the Company in the event of forfeiture of such Restricted Shares. The Employee's right to receive any extraordinary dividends or other distributions with respect to Restricted Shares prior to their becoming nonforfeitable shall be at the sole discretion of the Committee, but in the event of any such extraordinary event, the Committee shall take such action as is appropriate to preserve the value of, and prevent the unintended enhancement of the value of, the Restricted Shares.

        (b) In order to comply with any applicable securities laws, the Company may require the Employee (i) to furnish evidence satisfactory to the Company (including a written and signed representation letter) to the effect that the Restricted Shares were acquired for investment only and not for resale or distribution and (ii) to agree that the Restricted Shares shall only be sold by

the Employee following registration under the Securities Act of 1933, as amended, or pursuant to an exemption therefrom.

        (c) Unless otherwise determined by the Committee, any certificate issued in respect of the Restricted Shares prior to the lapse of any outstanding restrictions relating thereto shall bear the following legend:

The sale, transfer, alienation, attachment, assignment, pledge or encumbrance of the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the Jones Apparel Group, Inc. 1999 Stock Incentive Plan and an Agreement entered into by the registered owner and the Company dated as of _________, 20___. Copies of such Plan and Agreement are on file at the offices of the Company. Any attempt to dispose of these shares in contravention of the applicable restrictions, including by way of sale, assignment, transfer, pledge, hypothecation or otherwise, shall be null and void and without effect."

    2. Vesting.

    Subject to Section 3 hereof, the restrictions on transfer of the Restricted Shares shall lapse and the Restricted Shares shall become vested and nonforfeitable as follows:

        (a) See Annex I attached hereto.

        (b) In the event of (i) the dissolution or liquidation of the Company, or (ii) the disposition by the Company of substantially all of the assets or stock of a subsidiary of which the Employee is then an employee, officer or director, consultant, adviser, agent or independent representative or if (iii) a "change in control" (as defined in the Plan) of the Company has occurred or is about to occur, then, if the Committee shall so determine, any Restricted Shares not forfeited prior to the change in control shall become immediately and fully vested, and the Committee shall have sole discretion to waive automatic forfeitures, if any, arising from the change in control.

    3. Termination of Employment.

    Except as provided in Paragraph 4 hereof, Restricted Shares shall not vest unless the Employee is then an employee (including directors and officers who are employees), director or officer of the Company or any subsidiary of the Company, or a consultant, advisor, agent or independent representative of the Company or any subsidiary of the Company, or any combination thereof and unless the Employee has remained continuously so employed since the date of grant of the Restricted Shares.

2

    In the event that the employment of the Employee shall terminate (other than by reason of death, Disability or Retirement), all unvested Restricted Shares shall be forfeited and be immediately transferred to, and reacquired by, the Company at no cost to the Company.

    4. Acceleration of Benefits upon Death, Disability or Retirement of Employee or Change in Control.

    The period of restrictions applicable to all unvested Restricted Shares shall terminate on the date of termination of employment by reason of retirement, disability (as such terms are defined in the Plan) or death or, if the Committee shall so determine, upon a change in control (as defined in the Plan).

    5. Nontransferability of Restricted Shares.

    The Restricted Shares are not transferable and may not be sold, assigned, transferred, disposed of, pledged or otherwise encumbered by the Employee, other than by will or the laws of descent and distribution until such Restricted Shares become nonforfeitable in accordance with the provisions of this Agreement. Any Employee's successor (a "Successor") shall take rights herein granted subject to the terms and conditions hereof. No such transfer of the Restricted Shares to any Successor shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by such Successor of the terms and conditions hereof.

    6. No Right to Continued Employment.

    Nothing in this Agreement or the Plan shall confer upon the Employee any right to continue in the employ of the Company or any of its affiliate corporations or interfere in any way with the right of the Company or any such affiliate corporation to terminate such employment at any time.

    7. Withholding.

    The Employee shall pay to the Company promptly upon request, and in any event at the time the Employee recognizes taxable income in respect of the Restricted Shares, an amount equal to the taxes the Company determines it is required to withhold under applicable tax laws with respect to the Restricted Shares. Such payment shall be made in the form of cash, shares of Common Stock already owned for at least six months, or in a combination of such methods, as irrevocably elected by the Employee prior to the applicable tax due date with respect to such Restricted Shares. The Employee shall promptly notify the Company of any election made pursuant to Section 83(b) of the Code.

    8. Effect of Certain Changes.

    Notwithstanding any other provision of the Plan, in the event of a change in the outstanding Common Stock of the Company by reason of a stock dividend, split-up, split-down,

3

reverse split, recapitalization, merger, consolidation, combination or exchange of shares, spin-off, reorganization, liquidation or the like, then the Committee may appropriately adjust the aggregate number of shares and class of shares subject to this award, whose determination shall be conclusive.

    9. Payment of Transfer Taxes, Fees, and Other Expenses.

    The Company agrees to pay any and all original issue taxes and stock transfer taxes that may be imposed on the issuance of the Restricted Shares acquired pursuant to this Agreement, together with any and all of the fees and expenses necessarily incurred by the Company in connection therewith.

    10. Other Restrictions.

    The vesting of each Restricted Share shall be subject to the requirement that, if at any time the Committee shall determine that (i) the listing, registration or qualification of the shares of Common Stock subject or related thereto upon any securities exchange or under any state of federal law, or (ii) the consent or approval of any government regulatory body, or (iii) an agreement by the Employee with respect to the disposition of shares of Common Stock, is necessary or desirable as a condition of, or in connection with, such vesting, then in any such event, such vesting shall not be effective unless such listing, registration, qualification, consent, approval or agreement shall have been effected or obtained, free of any conditions not acceptable to the Committee.

    11. Notices.

    Any notices to be given under the terms of this Agreement shall be in writing and addressed to the Company in care of its Chief Operating and Financial Officer, 250 Rittenhouse Circle, Bristol, Pennsylvania 19007, and any notice to the Employee shall be addressed to him at his address now on file with the Company, or to such other address as either may last have designated to the other by notice as provided herein. Any notice so addressed shall be deemed to be given on the second business day after mailing, by registered or certified mail, at a post office or branch post office within the United States.

    12. Effect of Agreement.

    Except as otherwise provided hereunder, this Agreement shall be binding upon and shall inure to the benefit of any successor or successors of the Company.

    13. Laws Applicable to Construction.

    This Agreement has been granted, executed and delivered in the State of Pennsylvania, and the interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Pennsylvania, as applied to contracts executed in and performed wholly within the State of Pennsylvania.

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    14. Conflicts and Interpretation.

    If there is any conflict between this Agreement and the Plan, or if there is any ambiguity in this Agreement, any term which is not defined in this Agreement, or any matter as to which this Agreement is silent, in any such case the Plan shall govern, including, without limitation, the provisions thereof pursuant to which the Committee has the power, among others, to (i) interpret the Plan, (ii) prescribe, amend and rescind rules and regulations relating to the Plan and (iii) make all other determinations deemed necessary or advisable for the administration of the Plan. In the event that any question or controversy shall arise with respect to the nature, scope or extent of any one or more rights conferred by this award, the determination by the Committee (as constituted at the time of such determination) of the rights of the Employee shall be conclusive, final and binding upon the Employee and upon any other person who shall assert any right pursuant to this award.

    15. Headings.

    The headings of paragraphs herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any of the provisions of this Agreement.

    16. Amendment.

    This Agreement may not be modified, amended or waived in any manner except by an instrument in writing signed by both parties hereto. The waiver by either party of compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.

    IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and the Employee has hereunto set his hand.

JONES APPAREL GROUP, INC.

By: _________________________
      Ira M. Dansky
      Executive Vice President
  

EMPLOYEE:

____________________________
Employee

5

ANNEX I

(Insert here)

EX-31

EXHIBIT 31

CERTIFICATIONS

I, Peter Boneparth, President and Chief Executive Officer, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Jones Apparel Group, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
		(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
		(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
		(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
		(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 5, 2005
 

/s/ Peter Boneparth
Peter Boneparth
President and Chief Executive Officer

I, Wesley R. Card, Chief Operating and Financial Officer, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Jones Apparel Group, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
		(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
		(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
		(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
		(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 5, 2005
 

/s/ Wesley R. Card
Wesley R. Card
Chief Operating and Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

    I, Peter Boneparth, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Jones Apparel Group, Inc. on Form 10-Q for the fiscal quarter ended April 2, 2005 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Jones Apparel Group, Inc.

By: /s/ Peter Boneparth

Name: Peter Boneparth
Title: President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Jones Apparel Group, Inc. and will be retained by Jones Apparel Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

    I, Wesley R. Card, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Jones Apparel Group, Inc. on Form 10-Q for the fiscal quarter ended April 2, 2005 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Jones Apparel Group, Inc.

By: /s/ Wesley R. Card

Name: Wesley R. Card
Title: Chief Operating and Financial Officer

A signed original of this written statement required by Section 906 has been provided to Jones Apparel Group, Inc. and will be retained by Jones Apparel Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.