Form 10-Q

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Dg6rKNFgqFZ3bcLotqCTVHHlrNe03ztMVF6oBGyXlkSEszYUvGesMAcvQS0s+3YZ eYhS8WDp9XSBVwjD8KpKYw== 0000874016-09-000017.txt : 20090429 0000874016-09-000017.hdr.sgml : 20090429 20090429110958 ACCESSION NUMBER: 0000874016-09-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20090404 FILED AS OF DATE: 20090429 DATE AS OF CHANGE: 20090429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JONES APPAREL GROUP INC CENTRAL INDEX KEY: 0000874016 STANDARD INDUSTRIAL CLASSIFICATION: WOMEN'S, MISSES', AND JUNIORS OUTERWEAR [2330] IRS NUMBER: 060935166 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10746 FILM NUMBER: 09777757 BUSINESS ADDRESS: STREET 1: 1411 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 2126423860 MAIL ADDRESS: STREET 1: 1411 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10018 10-Q 1 tenq09_1q.htm FORM 10-Q Form 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 4, 2009

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.)
1411 Broadway New York, New York (Address of principal executive offices)	10018 (Zip Code)

(212) 642-3860
(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 a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [X]

Accelerated filer [ ]

Non-accelerated filer [ ]

Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

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 April 28, 2009
85,397,567

JONES APPAREL GROUP, INC.

Index		Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
	Consolidated Balance Sheets April 4, 2009, April 5, 2008 and December 31, 2008	3
	Consolidated Statements of Operations Fiscal Quarters ended April 4, 2009 and April 5, 2008	4
	Consolidated Statements of Stockholders' Equity Fiscal Quarters ended April 4, 2009 and April 5, 2008	5
	Consolidated Statements of Cash Flows Fiscal Quarters ended April 4, 2009 and April 5, 2008	6
	Notes to Consolidated Financial Statements	7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3. Quantitative and Qualitative Disclosures About Market Risk		26
Item 4. Controls and Procedures		26
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		27
Item 5. Other Information		27
Item 6. Exhibits		28
Signatures		29
Exhibit Index		30

DEFINITIONS

As used in this Report, unless the context requires otherwise, "our," "us" and "we" means Jones Apparel Group, Inc. and consolidated subsidiaries, "Barneys" means Barneys New York, Inc., "GRI" means GRI Group Limited, "McNaughton" means McNaughton Apparel Group, Inc., "Kasper" means Kasper, Ltd., "FASB" means the Financial Accounting Standards Board, "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 4, 2009			April 5, 2008			December 31, 2008

ASSETS			(Unaudited	)		(Unaudited	)
CURRENT ASSETS:
	Cash and cash equivalents	$	194.3		$	199.6		$	338.3
	Accounts receivable		479.4			491.7			370.2
	Inventories, primarily finished goods		473.9			464.6			509.5
	Prepaid income taxes		11.7			6.7			16.9
	Deferred taxes		29.6			30.4			28.0
	Prepaid expenses and other current assets		47.4			51.3			42.6

	TOTAL CURRENT ASSETS		1,236.3			1,244.3			1,305.5
PROPERTY, PLANT AND EQUIPMENT, at cost, less accumulated depreciation and amortization of $470.1, $465.0 and $484.3			270.1			314.6			301.0
GOODWILL			160.7			973.9			160.7
OTHER INTANGIBLES, at cost, less accumulated amortization			590.3			617.4			590.8
DEFERRED TAXES			15.5			-			14.2
OTHER ASSETS			56.3			38.2			55.3

	TOTAL ASSETS	$	2,329.2		$	3,188.4		$	2,427.5

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
	Short-term borrowings	$	9.0		$	-		$	-
	Current portion of long-term debt		250.0			-			250.0
	Current portion of capital lease obligations		2.9			4.6			3.1
	Accounts payable		149.6			178.3			231.4
	Income taxes payable		-			21.1			0.1
	Accrued employee compensation and benefits		23.8			25.9			30.0
	Accrued restructuring and severance payments		9.1			21.0			13.0
	Accrued expenses and other current liabilities		76.6			85.8			84.3

	TOTAL CURRENT LIABILITIES		521.0			336.7			611.9

NONCURRENT LIABILITIES:
	Long-term debt		499.5			749.4			499.5
	Obligations under capital leases		28.8			27.4			29.4
	Deferred taxes		-			4.0			-
	Income taxes payable		21.2			-			20.8
	Other		77.7			62.3			83.7

	TOTAL NONCURRENT LIABILITIES		627.2			843.1			633.4

	TOTAL LIABILITIES		1,148.2			1,179.8			1,245.3

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 156.8, 154.9 and 154.8		1.6			1.5			1.5
	Additional paid-in capital		1,353.9			1,345.3			1,350.7
	Retained earnings		1,664.1			2,488.3			1,668.0
	Accumulated other comprehensive (loss) income		(12.3	)		0.8			(11.7	)
	Treasury stock, 71.4, 68.3 and 71.4 shares, at cost		(1,826.3	)		(1,827.3	)		(1,826.3	)

	TOTAL STOCKHOLDERS' EQUITY		1,181.0			2,008.6			1,182.2

	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,329.2		$	3,188.4		$	2,427.5

See accompanying notes to consolidated financial statements

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

	Fiscal Quarter Ended

		April 4, 2009		April 5, 2008

Net sales	$	879.4	$	963.4
Licensing income		11.5		11.5
Other revenues		0.2		0.5

Total revenues		891.1		975.4
Cost of goods sold		597.8		654.7

Gross profit		293.3		320.7
Selling, general and administrative expenses		279.6		280.8

Operating income		13.7		39.9
Interest income		0.9		2.5
Interest expense and financing costs		13.8		12.2
Gain on sale of interest in Australian joint venture		-		0.3
Equity in loss of unconsolidated affiliate		0.3		-

Income before provision for income taxes		0.5		30.5
Provision for income taxes		0.2		11.0

Net income	$	0.3	$	19.5

Earnings per common share
Basic	$	0.00	$	0.23
Diluted		0.00		0.23
Weighted average common shares and share equivalents outstanding
Basic		81.7		84.6
Diluted		81.7		84.6
Dividends declared per share	$	0.05	$	0.14

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, 2008		85.3	$	1,996.8		$	1.5	$	1,339.7		$	2,480.8		$	2.1		$	(1,827.3	)
Fiscal quarter ended April 5, 2008:
Comprehensive income:
	Net income	-		19.5			-		-			19.5			-			-
	Change in fair value of cash flow hedges, net of $0.2 tax	-		0.4			-		-			-			0.4			-
	Reclassification adjustment for hedge gains and losses included in net loss, net of $0.3 tax	-		0.3			-		-			-			0.3			-
	Foreign currency translation adjustments	-		(2.0	)		-		-			-			(2.0	)		-

	Total comprehensive income			18.2

Issuance of restricted stock to employees, net of forfeitures		1.3		-			-		-			-			-			-
Amortization expense in connection with employee stock options and restricted stock		-		6.9			-		6.9			-			-			-
Excess tax benefit derived from exercise of employee stock options and vesting of restricted stock		-		(1.3	)		-		(1.3	)		-			-			-
Dividends on common stock ($0.14 per share)		-		(12.0	)		-		-			(12.0	)		-			-

Balance, April 5, 2008		86.6	$	2,008.6		$	1.5	$	1,345.3		$	2,488.3		$	0.8		$	(1,827.3	)

Balance, January 1, 2009		83.4	$	1,182.2		$	1.5	$	1,350.7		$	1,668.0		$	(11.7	)	$	(1,826.3	)
Fiscal quarter ended April 4, 2009:
Comprehensive loss:
	Net income	-		0.3			-		-			0.3			-			-
	Change in fair value of cash flow hedges	-		0.1			-		-			-			0.1			-
	Reclassification adjustment for hedge gains and losses included in net income, net of $0.1 tax	-		(0.2	)		-		-			-			(0.2	)		-
	Foreign currency translation adjustments	-		(0.5	)		-		-			-			(0.5	)		-

	Total comprehensive loss			(0.3	)

Issuance of restricted stock to employees, net of forfeitures		2.0		-			-		-			-			-			-
Amortization expense in connection with employee stock options and restricted stock		-		4.2			0.1		4.1			-			-			-
Excess tax benefit derived from vesting of restricted stock		-		(0.9	)		-		(0.9	)		-			-			-
Dividends on common stock ($0.05 per share)		-		(4.2	)		-		-			(4.2	)		-			-

Balance, April 4, 2009		85.4	$	1,181.0		$	1.6	$	1,353.9		$	1,664.1		$	(12.3	)	$	(1,826.3	)

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 4, 2009			April 5, 2008

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income			$	0.3		$	19.5

Adjustments to reconcile net income to net cash used in operating activities:
	Amortization of employee stock options and restricted stock			4.2			6.9
	Depreciation and other amortization			18.6			21.8
	Impairment losses on property, plant and equipment			20.4			-
	Gain on sale of interest in Australian joint venture			-			(0.3	)
	Equity in loss of unconsolidated affiliate			0.3			-
	Provision for losses on accounts receivable			1.9			0.3
	Deferred taxes			(3.0	)		8.6
	Other items, net			0.6			(0.6	)
	Changes in operating assets and liabilities:
		Accounts receivable		(111.0	)		(155.3	)
		Inventories		35.4			59.3
		Prepaid expenses and other current assets		(4.9	)		14.1
		Other assets		(1.3	)		(1.1	)
		Accounts payable		(81.7	)		(45.0	)
		Income taxes payable/prepaid income taxes		4.6			22.9
		Accrued expenses and other current liabilities		(17.7	)		(13.2	)
		Other liabilities		(6.0	)		(4.2	)

		Total adjustments		(139.6	)		(85.8	)

	Net cash used in operating activities			(139.3	)		(66.3	)

CASH FLOWS FROM INVESTING ACTIVITIES:
	Capital expenditures			(8.3	)		(22.5	)
	Proceeds from sale of interest in Australian joint venture			-			0.3

	Net cash used in investing activities			(8.3	)		(22.2	)

CASH FLOWS FROM FINANCING ACTIVITIES:
	Net increase in short-term borrowings			9.0			-
	Dividends paid			(4.2	)		(12.0	)
	Principal payments on capital leases			(0.9	)		(1.2	)

	Net cash provided by (used in) financing activities			3.9			(13.2	)

EFFECT OF EXCHANGE RATES ON CASH				(0.3	)		(1.5	)

NET DECREASE IN CASH AND CASH EQUIVALENTS				(144.0	)		(103.2	)
CASH AND CASH EQUIVALENTS, BEGINNING				338.3			302.8

CASH AND CASH EQUIVALENTS, ENDING			$	194.3		$	199.6

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 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.

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 to the current presentation. The foregoing interim results are not necessarily indicative of the results of operations for the full year ending December 31, 2009.

ACCOUNTS RECEIVABLE

Accounts receivable consist of the following:

(In millions)
April 4,
2009 April 5,
2008 December 31,
2008

Trade accounts receivable $ 514.0 $ 531.5 $ 397.6

Allowances for doubtful accounts, returns, discounts and co-op advertising (34.6 ) (39.8 ) (27.4 )

$ 479.4 $ 491.7 $ 370.2

Due to our 10% ownership interest in GRI, GRI is deemed to be a related party. Included in accounts receivable are amounts due from GRI in the amount of $50.2 million, $21.2 million and $43.3 million at April 4, 2009, April 5, 2008 and December 31, 2008, respectively. Net revenues from GRI amounted to $12.3 million and $13.5 million for the fiscal quarters ended April 4, 2009 and April 5, 2008, respectively. On April 23, 2009, we converted $10.0 million of the outstanding GRI accounts receivable to a three-year interest-bearing convertible note. GRI has the option, during the 90-day period that begins when the audited financial statements for the GRI fiscal year ending January 31, 2011 become available (or such shorter period that ends on the maturity date of the note), to convert the note into common shares of GRI at a conversion rate based on the greater of eight times the net income of GRI for such fiscal year, or an appraised value.

ACCRUED RESTRUCTURING COSTS

Manufacturing Restructuring
On September 12, 2006, we announced the closing of certain El Paso, Texas and Mexican operations related to the decision by Polo to discontinue the Polo Jeans Company product line (the "manufacturing restructuring"), which we produced for Polo subsequent to the sale of the Polo Jeans Company business to Polo in February 2006. In connection with the closings, we previously incurred $6.9 million of one-time termination benefits and associated employee costs for 1,838 employees and $1.0 million of other costs. The closings were substantially completed by the end of March 2007. On May 8, 2008, we sold the Mexican operations for $5.9 million, resulting in a gain of $0.2 million.

The details of the manufacturing restructuring accruals are as follows:

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(In millions)		One-time termination benefits		Other associated costs			Total manufacturing restructuring

Balance, January 1, 2008	$	0.3	$	0.9		$	1.2
Payments and reductions		-		(0.1	)		(0.1	)

Balance, April 5, 2008	$	0.3	$	0.8		$	1.1


Balance, January 1, 2009	$	-	$	0.1		$	0.1
Payments and reductions		-		-			-

Balance, April 4, 2009	$	-	$	0.1		$	0.1

The net accruals of $1.1 million at April 5, 2008 and $0.1 million at April 4, 2009 are reported as accrued restructuring and severance payments.

Moderate Apparel Restructuring
In connection with the exit from and reorganization of certain moderate apparel product lines, we decided to close certain New York offices, and on October 9, 2007, we announced the closing of warehouse facilities in Goose Creek, South Carolina. We previously recorded $7.4 million of one-time termination benefits and associated employee costs for approximately 440 employees and $0.9 million of lease obligations as selling, general and administrative expenses in our wholesale jeanswear segment. During the fiscal quarter ended April 4, 2009, we recorded $1.9 million of additional lease obligation costs as selling, general and administrative expenses in our wholesale jeanswear segment relating to one of the warehouse facilities. These closings were substantially complete by the end of February 2008.

The details of the moderate apparel restructuring accruals are as follows:

(In millions)		One-time termination benefits			Lease obligations			Total moderate apparel restructuring

Balance, January 1, 2008	$	5.7		$	-		$	5.7
Additions		0.1			-			0.1
Payments and reductions		(3.5	)		-			(3.5	)

Balance, April 5, 2008	$	2.3		$	-		$	2.3

Balance, January 1, 2009	$	0.9		$	0.3		$	1.2
Additions		-			1.9			1.9
Payments and reductions		(0.2	)		(0.4	)		(0.6	)

Balance, April 4, 2009	$	0.7		$	1.8		$	2.5

During the fiscal quarters ended April 5, 2008 and April 4, 2009, $3.5 million and $0.2 million of the termination benefits accrual were utilized (relating to partial or full severance for 310 employees and one employee, respectively). The net accrual of $2.3 million at April 5, 2008 is reported as accrued restructuring and severance payments. The net accrual of $2.5 million at April 4, 2009 is reported as $1.8 million of accrued restructuring and severance payments and $0.7 million of other noncurrent liabilities.

Other Restructurings
In 2007, we discontinued our Anne Klein Accessories retail concept. We accrued $0.1 million of one-time termination benefits and associated employee costs in 2007 for 26 employees. These amounts were paid during the fiscal quarter ended April 5, 2008.

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fixtures located in the stores to be closed. These costs are reported as selling, general and administrative expenses in the retail segment.

On October 17, 2007, we announced the closing of warehouse facilities in Edison, New Jersey. In connection with the closing, we accrued $2.6 million of one-time termination benefits and associated employee costs for 158 employees. These costs are reported as selling, general and administrative expenses in the wholesale jeanswear segment. The closing was substantially complete by the end of June 2008.

The details of these restructuring accruals are as follows:

(In millions)		Retail stores			Edison warehouse

Balance, January 1, 2008	$	0.1		$	2.8
Additions		-			0.5
Payments and reductions		(0.1	)		-

Balance, April 5, 2008	$	-		$	3.3

Balance, January 1, 2009	$	-		$	0.4
Additions		3.1			-
Payments and reductions		(0.7	)		(0.4	)

Balance, April 4, 2009	$	2.4		$	-

During the fiscal quarters ended April 5, 2008 and April 4, 2009, $0.1 million and $0.7 million of the retail store termination benefits accrual were utilized (relating to partial or full severance for 26 and 45 employees, respectively). The net accrual of $3.3 million at April 5, 2008 is reported as accrued restructuring and severance payments. The net accrual of $2.4 million at April 4, 2009 is reported as $1.5 million of accrued restructuring and severance payments and $0.9 million of other noncurrent liabilities.

Acquisition Restructurings
In connection with the acquisitions of McNaughton and Kasper, we assessed and formulated plans to restructure certain operations of each company to eliminate unprofitable or marginally profitable lines of business and reduce overhead expenses. These costs were reported as a component of goodwill.

The details of the remaining acquisition restructuring accruals are as follows:

(In millions)		One-time termination benefits		Other costs			Total acquisition restructuring

Balance, January 1, 2008	$	0.1	$	1.1		$	1.2
Payments and reductions				(0.1	)		(0.1	)

Balance, April 5, 2008	$	0.1	$	1.0		$	1.1

Balance, January 1, 2009	$	-	$	0.8		$	0.8
Payments and reductions		-		(0.1	)		(0.1	)

Balance, April 4, 2009	$	-	$	0.7		$	0.7

The net accrual of $1.1 million at April 5, 2008 is reported as $0.1 million of accrued restructuring and severance payments and $1.0 million of other noncurrent liabilities. The net accrual of $0.7 million at April 4, 2009 is reported as other noncurrent liabilities.

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FAIR VALUES

SFAS No. 157, "Fair Value Measurements," defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework, creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements, and details the disclosures that are required for items measured at fair value. We currently do not have non-financial assets and non-financial liabilities that are required to be measured at fair value on a recurring basis. Under SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities," entities are permitted to choose to measure many financial instruments and certain other items at fair value. We did not elect the fair value measurement option under SFAS No. 159 for any of our financial assets or liabilities.

We have several financial instruments that must be measured under the fair value standard, including derivatives, the assets and liabilities of the Jones Apparel Group, Inc. Deferred Compensation Plan (the "Rabbi Trust") and deferred director fees that are valued based on the quoted market price of our common stock. Our financial assets and liabilities are to be measured using inputs from the three levels of the fair value hierarchy, which are as follows:

Level 1 - inputs are unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date;
Level 2 - inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs); and
Level 3 - unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing assets or liabilities based on the best information available.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

In accordance with the fair value hierarchy described above, the following table shows the fair value of our financial assets and liabilities that are required to be measured at fair value on a recurring basis at April 5, 2008 and April 4, 2009.

(In millions) Description	Classification		Value at April 5, 2008		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)

Rabbi Trust assets	Other current assets	$	8.9	$	8.9	$	-	$	-

	Total assets	$	8.9	$	8.9	$	-	$	-

Rabbi Trust liabilities	Accrued employee compensation and benefits	$	8.9	$	8.9	$	-	$	-
Derivatives	Accrued expenses and other current liabilities		0.6		-		0.6		-
Deferred director fees	Accrued expenses and other current liabilities		0.4		0.4		-		-

	Total liabilities	$	9.9	$	9.3	$	0.6	$	-

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(In millions) Description	Classification		Value at April 4, 2009		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)

Rabbi Trust assets	Other current assets	$	6.0	$	6.0	$	-	$	-

	Total assets	$	6.0	$	6.0	$	-	$	-

Rabbi Trust liabilities	Accrued employee compensation and benefits	$	6.0	$	6.0	$	-	$	-
Deferred director fees	Accrued expenses and other current liabilities		0.3		0.3		-		-

	Total liabilities	$	6.3	$	6.3	$	-	$	-

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

In accordance with the fair value hierarchy described above, the following table shows the fair value of our non-financial assets and liabilities that were required to be measured at fair value on a nonrecurring basis at April 4, 2009, and the total losses recorded as a result of the remeasurement process.

(In millions)				Fair Value Measurements Using

Description		Value at April 4, 2009		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total losses recorded for the Fiscal Quarter Ended April 4, 2009

Property and equipment	$	-	$	-	$	-	$	-	$	20.4

In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," property and equipment utilized in our retail operations with a carrying amount of $20.4 million were written down to a fair value of zero, which was recorded as a selling, general and administrative expense in the retail segment. We consider long-term assets utilized in a retail location to be impaired when a pattern of operating losses at the location indicate that future operating losses are probable and that the resulting cash flows will not be sufficient to recover the carrying value of the associated long-term assets.

Financial Instruments

At April 4, 2009 and April 5, 2008, the fair values of cash and cash equivalents, receivables and accounts payable approximated their carrying values due to the short-term nature of these instruments. The estimated fair values of other financial instruments subject to fair value disclosures, determined based on broker quotes or quoted market prices or rates for the same or similar instruments, and the related carrying amounts are as follows:

(In millions)	April 4, 2009				April 5, 2008

	Carrying Amount		Fair Value		Carrying Amount			Fair Value
Long-term debt, including current portion	$	749.5	$	542.5	$	749.4		$	614.1
Foreign currency exchange contracts, net asset (liability)		-		-		(0.6	)		(0.6	)

Financial instruments expose us to counterparty credit risk for nonperformance and to market risk for changes in interest and currency rates. We manage exposure to counterparty credit risk through specific minimum credit standards, diversification of counterparties and procedures to monitor the

- 11 -

amount of credit exposure. Our financial instrument counterparties are substantial investment or commercial banks with significant experience with such instruments.

SHORT-TERM BORROWINGS

We participate in computerized payable settlement arrangements with certain independent contractors and third-party intermediaries. The arrangements provide that, at the independent contractor's request, the third-party intermediary advances the amount of the scheduled payment to the contractor, less an appropriate discount, before the scheduled payment date. We make payment to the third-party intermediary on the date stipulated in accordance with the commercial terms negotiated with our independent contractors. Amounts that will be paid to the third-party intermediaries that have been advanced at the contractor's request are classified as short-term borrowings. Imputed interest on the borrowings was insignificant for reclassification to interest expense. The change in the amounts outstanding is reported as cash provided from financing activities on the consolidated statement of cash flows.

CREDIT FACILITIES

Prior to January 5, 2009, we had a revolving credit agreement with several lending institutions to borrow an aggregate principal amount of up to $750 million. This agreement, which expires in May 2010, can be used for letters of credit or cash borrowings. On December 24, 2008, we announced that, effective as of January 5, 2009, we amended this facility to reduce the aggregate commitment to $600 million, increase the fees and interest rates, modify certain covenants and provide collateral for borrowings. Otherwise, the terms and conditions of the credit facility remained substantially unchanged.

Up to $450 million of the amended facility is available for the issuance of trade and standby letters of credit, and cash borrowings are limited to the lesser of (a) $400 million less amounts owed to the lending institutions or their administrative agent under hedging agreements, treasury management services agreements, open account agreements, letters of credit (other than those issued under the facility) and other funded loans (the "Additional Secured Agreements") and (b) the maximum amount of obligations permitted to be secured pursuant to the Indenture dated November 22, 2004 (relating to our outstanding Senior Notes) without any requirement to equally and ratably secure such Senior Notes. Borrowings under the amended revolving credit facility may be used to refinance existing indebtedness, for working capital needs and for other general corporate purposes, including acquisitions. Cash borrowings under the amended revolving credit facility and obligations under the Additional Secured Agreements are secured by inventory and receivables of Jones USA and certain of its affiliates, as well as the proceeds of such inventory and receivables, but only to the extent that the grant of that security would not require the Senior Notes issued under the Indenture to be equally and ratably secured by that collateral.

The amended revolving credit agreement requires us to satisfy a minimum Interest Coverage Ratio, a maximum Covenant Debt to EBITDA Ratio and a minimum Asset Coverage Ratio (each as defined in the amended facility expiring on May 16, 2010), and contains covenants limiting our ability to (1) incur debt and guaranty obligations, (2) incur liens, (3) make loans, advances, investments and acquisitions, (4) merge or liquidate, (5) sell or transfer assets, (6) pay dividends, repurchase shares, or make distributions to stockholders, (7) engage in transactions with affiliates and (8) make capital expenditures. At April 4, 2009, we were in compliance with all covenants under the facility.

At April 4, 2009, $90.6 million of letters of credit and no cash borrowings were outstanding under the revolving credit facility. The estimated maximum amount of cash borrowings that was available to us on that date was $391.0 million. At April 4, 2009, we also had a C$10.0 million unsecured line of credit in Canada, under which C$0.2 million of letters of credit were outstanding.

- 12 -

increase of up to $50 million in the size of the New Credit Facility by obtaining additional commitments from lenders under the New Credit Facility or from other entities with the consent of the administrative agent. Under the New Credit Facility, up to the entire amount of the facility will be available for cash borrowings, with up to $400 million (assuming the overall size of the New Credit Facility is $600 million) available for trade letters of credit and up to $50 million (assuming the overall size of the New Credit Facility is $600 million) for standby letters of credit, and a subfacility available to our Canadian subsidiaries of up to $25 million for letters of credit and borrowings. Borrowings under the New Credit Facility may be used to refinance existing indebtedness, to repay the 2009 Notes, and for general corporate purposes in the ordinary course of business. Such borrowings will bear interest either based on the alternate base rate, as defined in the New Credit Facility, or based on Eurocurrency rates, each with a margin that depends on the availability remaining under the New Credit Facility. The New Credit Facility contains customary events of default.

Availability under the New Credit Facility will be determined in reference to a borrowing base consisting of a percentage of eligible accounts receivable, credit card receivables, inventory and licensee receivables, minus reserves determined by the joint collateral agents. If availability under the New Credit Facility falls below a certain level, we will be required to comply with a minimum fixed charge coverage ratio. The New Credit Facility also contains affirmative and negative covenants that, among other things, will limit or restrict our ability to (1) incur indebtedness, (2) create liens, (3) merge, consolidate, liquidate or dissolve, (4) make investments (including acquisitions), loans or advances, (5) sell assets, (6) enter into sale and leaseback transactions, (7) enter into swap agreements, (8) make certain restricted payments (including dividends and other payments in respect of capital stock), (9) enter into transactions with affiliates, (10) enter into restrictive agreements, and (11) amend material documents. The New Credit Facility will be secured by a first priority lien on substantially all of our personal property.

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" (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 use foreign currency forward contracts for the specific purpose of hedging the exposure to variability in forecasted cash flows associated primarily with inventory purchases. These instruments are designated as cash flow hedges as the principal terms of the forward exchange contracts are the same as the underlying forecasted foreign currency cash flows. Therefore, changes in the fair value of the forward contracts should be highly effective in offsetting changes in the expected foreign currency cash flows, and accordingly, changes in the fair value of forward exchange contracts are recorded in accumulated other comprehensive income, net of related tax effects, with the corresponding asset or liability recorded in the balance sheet. Amounts recorded in accumulated other comprehensive income are reflected in current-period earnings when the hedged transaction affects earnings.

The following summarizes the U.S. Dollar notional amount and the fair value of our Canadian foreign currency forward exchange contracts, which are classified as cash flow hedges under SFAS 133. The contracts outstanding at April 4, 2009 mature at various dates through September 30, 2009.

- 13 -

(In millions)	April 4, 2009				April 5, 2008

		Notional amount		Fair value		Notional amount		Fair value - other current liabilities
Canadian Dollar - U.S. Dollar	$	6.7	$	-	$	17.9	$	0.6

The effect of our cash flow hedges on the statement of operations was as follows:

(In millions)

Amount of Pretax Gain (Loss) Recognized in Other Comprehensive Income

Amount of Pretax Gain (Loss) Reclassified from Other Comprehensive Income into Income

Derivative type

Fiscal Quarter Ended
April 4, 2009

Fiscal Quarter Ended
April 5, 2008

Location of Pretax Gain (Loss) Reclassified from Other Comprehensive Income into Income

Fiscal Quarter Ended
April 4, 2009

Fiscal Quarter Ended
April 5, 2008

Foreign exchange contracts

0.1

0.6

Cost of sales

0.3

(0.6

)

Since the derivatives we use in our risk management strategies are highly effective hedges because all the critical terms of the derivative instruments match those of the hedged item, we record no ineffectiveness related to our cash flow hedges. If foreign currency exchange rates do not change from their April 4, 2009 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.

EARNINGS PER SHARE

In June 2008, the FASB issued FASB Staff Position No. EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities" ("EITF 03-6-1"), which classifies unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) as participating securities and requires them to be included in the computation of earnings per share pursuant to the two-class method described in SFAS No. 128, "Earnings per Share." This Staff Position is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. All prior-period earnings per share data presented are to be adjusted retrospectively (including interim financial statements, summaries of earnings, and selected financial data). The adoption of this Staff Position required us to allocate a portion of net income to the unvested restricted shares held by our employees and directors, which are classified as participating securities under EITF 03-6-1. Prior period earnings per share figures have been restated to conform to this presentation.

The computation of basic and diluted earnings per share under the two-class method is as follows:

Fiscal Quarter Ended		April 4, 2009		April 5, 2008

(In millions except per share amounts)

Net income	$	0.3	$	19.5
Less: income allocated to participating securities		-		(0.3	)

Income available to common stockholders	$	0.3	$	19.2


Weighted-average common shares outstanding - basic		81.7		84.6
Effect of dilutive employee stock options		-		-

Weighted-average common shares and share equivalents outstanding - diluted		81.7		84.6


Earnings per share - basic	$	0.00	$	0.23
Earnings per share - diluted		0.00		0.23

- 14 -

STATEMENT OF CASH FLOWS

Fiscal Quarter Ended		April 4, 2009			April 5, 2008

(In millions)
Supplemental disclosures of cash flow information:
Cash paid (received) during the period for:
Interest	$	1.6		$	1.7
Net income tax refunds		(2.1	)		(21.9	)

Supplemental disclosures of non-cash investing and financing activities:
Restricted stock issued to employees		7.0			20.2

JOINT VENTURES

We had a 50% ownership interest in a joint venture with Sutton Development Pty. Ltd. ("Sutton") to operate retail locations in Australia, which operated under the name Nine West Australia Pty Ltd. We sold our interest in this joint venture to Sutton on December 3, 2007 for $20.7 million, which resulted in a pre-tax gain of $8.2 million. The sales price was subject to certain working capital adjustments, which resulted in additional sales proceeds and pre-tax gain of $0.3 million in the fiscal quarter ended April 5, 2008.

PENSION PLANS

Components of Net Periodic Benefit Cost

(In millions)	Fiscal Quarter Ended

		April 4, 2009			April 5, 2008

Interest cost	$	0.7		$	0.7
Expected return on plan assets		(0.6	)		(0.7	)
Amortization of net loss		0.4			0.2

Net periodic benefit cost	$	0.5		$	0.2

Employer Contributions

During the fiscal quarter ended April 4, 2009, we did not make any contributions to our defined benefit pension plans. We anticipate contributing $5.8 million during 2009.

We previously participated in a multi-employer defined benefit plan that covered union employees at a distribution center that has been closed. As a result of closing this facility, in March 2009 we paid a partial withdrawal liability payment of $2.4 million.

SEGMENT INFORMATION

We identify operating segments based on, among other things, differences in products sold and 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 jeanswear, 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 and our own retail stores, the retail segment includes operations by our own stores and e-commerce web sites, and income and expenses related to trademarks, licenses and general corporate

- - 15 -

functions are reported under "licensing, other and eliminations." We define segment profit as operating income before net interest expense, goodwill impairment charges, gains or losses on sales of subsidiaries, 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 4, 2009 and April 5, 2008. We are an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, we do not represent that these segments, if operated independently, would report the operating profit and other financial information shown below.

(In millions)			Wholesale Better Apparel		Wholesale Jeanswear		Wholesale Footwear & Accessories		Retail			Licensing, Other & Eliminations			Consolidated

For the fiscal quarter ended April 4, 2009
	Revenues from external customers	$	291.8	$	228.2	$	218.4	$	141.2		$	11.5		$	891.1
	Intersegment revenues		39.2		1.0		18.5		-			(58.7	)		-

	Total revenues		331.0		229.2		236.9		141.2			(47.2	)		891.1

	Segment income (loss)	$	49.6	$	17.3	$	15.9	$	(58.4	)	$	(10.7	)		13.7

	Net interest expense														(12.9	)
	Equity in loss of unconsolidated affiliate														(0.3	)

	Income before provision for income taxes													$	0.5

For the fiscal quarter ended April 5, 2008
	Revenues from external customers		331.5		220.6		252.5		158.9			11.9			975.4
	Intersegment revenues		39.8		1.1		20.4		-			(61.3	)		-

	Total revenues		371.3		221.7		272.9		158.9			(49.4	)		975.4

	Segment income (loss)	$	59.3	$	4.4	$	22.6	$	(24.8	)	$	(21.6	)		39.9

	Net interest expense														(9.7	)
	Gain on sale of interest in Australian joint venture														0.3

	Income before provision for income taxes													$	30.5

SUPPLEMENTAL CONDENSED FINANCIAL INFORMATION

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

The following condensed consolidating balance sheets, statements of operations and statements of cash flows for the "Issuers" (consisting of Jones and Jones USA, Jones Holdings, Nine West and Jones Retail, which are all our subsidiaries that act as co-issuers and co-obligors) and the "Others" (consisting of all of our other subsidiaries, excluding all obligor 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.

- 16 -

Condensed Consolidating Balance Sheets
(In millions)

		April 4, 2009												December 31, 2008
			Issuers			Others			Elim- inations			Cons- olidated			Issuers			Others			Elim- inations			Cons- olidated
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents	$	192.9		$	1.4		$	-		$	194.3		$	318.4		$	19.9		$	-		$	338.3
	Accounts receivable		306.6			172.8			-			479.4			219.7			150.5			-			370.2
	Inventories		308.9			165.0			-			473.9			339.3			170.6			(0.4	)		509.5
	Prepaid and refundable income taxes		3.5			0.2			8.0			11.7			15.0			0.2			1.7			16.9
	Deferred taxes		15.0			15.8			(1.2	)		29.6			12.5			16.7			(1.2	)		28.0
	Prepaid expenses and other current assets		40.2			7.2			-			47.4			34.7			7.9			-			42.6

	TOTAL CURRENT ASSETS		867.1			362.4			6.8			1,236.3			939.6			365.8			0.1			1,305.5

Property, plant and equipment - net			110.0			160.1			-			270.1			135.4			165.6			-			301.0
Due from affiliates			-			1,168.2			(1,168.2	)		-			-			1,154.6			(1,154.6	)		-
Goodwill			160.7			-			-			160.7			160.7			-			-			160.7
Other intangibles - net			0.5			589.8			-			590.3			0.5			590.3			-			590.8
Deferred taxes			80.0			-			(64.5	)		15.5			73.7			-			(59.5	)		14.2
Investments in subsidiaries			1,895.9			-			(1,895.9	)		-			1,866.2			-			(1,866.2	)		-
Other assets			26.4			30.1			(0.2	)		56.3			25.9			29.6			(0.2	)		55.3

	TOTAL ASSETS	$	3,140.6		$	2,310.6		$	(3,122.0	)	$	2,329.2		$	3,202.0		$	2,305.9		$	(3,080.4	)	$	2,427.5

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
	Short-term borrowings	$	9.0		$	-		$	-		$	9.0		$	-		$	-		$	-		$	-
	Current portion of long-term debt		250.0			-			-			250.0			250.0			-			-			250.0
	Current portion of capital lease obligations		-			2.9			-			2.9			-			3.1			-			3.1
	Accounts payable		96.5			53.1			-			149.6			160.4			71.0			-			231.4
	Income taxes payable		-			10.0			(10.0	)		-			-			19.5			(19.4	)		0.1
	Deferred taxes		-			1.2			(1.2	)		-			-			1.3			(1.3	)		-
	Accrued expenses and other current liabilities		70.6			38.9			-			109.5			85.7			41.6			-			127.3

	TOTAL CURRENT LIABILITIES		426.1			106.1			(11.2	)		521.0			496.1			136.5			(20.7	)		611.9

NONCURRENT LIABILITIES:
	Long-term debt		499.5			-			-			499.5			499.5			-			-			499.5
	Obligations under capital leases		-			28.8			-			28.8			-			29.4			-			29.4
	Deferred taxes		-			52.1			(52.1	)		-			-			47.1			(47.1	)		-
	Income taxes payable		15.9			5.3			-			21.2			15.6			5.2			-			20.8
	Due to affiliates		1,168.2			-			(1,168.2	)		-			1,154.6			-			(1,154.6	)		-
	Other		59.7			18.0			-			77.7			66.8			16.9			-			83.7

	TOTAL NONCURRENT LIABILITIES		1,743.3			104.2			(1,220.3	)		627.2			1,736.5			98.6			(1,201.7	)		633.4

	TOTAL LIABILITIES		2,169.4			210.3			(1,231.5	)		1,148.2			2,232.6			235.1			(1,222.4	)		1,245.3

STOCKHOLDERS' EQUITY:
	Common stock and additional paid-in capital		1,355.5			1,706.7			(1,706.7	)		1,355.5			1,352.2			1,706.8			(1,706.8	)		1,352.2
	Retained earnings		1,454.3			395.8			(186.0	)		1,664.1			1,455.2			365.7			(152.9	)		1,668.0
	Accumulated other comprehensive loss		(12.3	)		(2.2	)		2.2			(12.3	)		(11.7	)		(1.7	)		1.7			(11.7	)
	Treasury stock		(1,826.3	)		-			-			(1,826.3	)		(1,826.3	)		-			-			(1,826.3	)

	TOTAL STOCKHOLDERS' EQUITY		971.2			2,100.3			(1,890.5	)		1,181.0			969.4			2,070.8			(1,858.0	)		1,182.2

	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	3,140.6		$	2,310.6		$	(3,122.0	)	$	2,329.2		$	3,202.0		$	2,305.9		$	(3,080.4	)	$	2,427.5

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Condensed Consolidating Statements of Operations
(In millions)

	Fiscal Quarter Ended April 4, 2009											Fiscal Quarter Ended April 5, 2008

		Issuers			Others			Elim- inations			Cons- olidated		Issuers			Others			Elim- inations			Cons- olidated

Net sales	$	628.1		$	255.1		$	(3.8	)	$	879.4	$	712.1		$	255.8		$	(4.5	)	$	963.4
Licensing income		-			11.5			-			11.5		-			11.5			-			11.5
Other revenues		0.2			-			-			0.2		0.2			0.3			-			0.5

Total revenues		628.3			266.6			(3.8	)		891.1		712.3			267.6			(4.5	)		975.4
Cost of goods sold		411.2			188.6			(2.0	)		597.8		472.0			188.2			(5.5	)		654.7

Gross profit		217.1			78.0			(1.8	)		293.3		240.3			79.4			1.0			320.7
Selling, general and administrative expenses		249.4			32.9			(2.7	)		279.6		237.8			46.2			(3.2	)		280.8

Operating (loss) income		(32.3	)		45.1			0.9			13.7		2.5			33.2			4.2			39.9
Net interest expense (income) and financing costs		14.2			(1.3	)		-			12.9		13.1			(3.4	)		-			9.7
Gain on sale of interest in Australian joint venture		-			-			-			-		-			0.3			-			0.3
Equity in loss of unconsolidated affiliate		-			0.3			-			0.3		-			-			-			-

(Loss) income before (benefit) provision for income taxes and equity in earnings of subsidiaries		(46.5	)		46.1			0.9			0.5		(10.6	)		36.9			4.2			30.5
(Benefit) provision for income taxes		(19.0	)		16.0			3.2			0.2		0.8			11.9			(1.7	)		11.0
Equity in earnings of subsidiaries		30.7			-			(30.7	)		-		30.3			-			(30.3	)		-

Net income	$	3.2		$	30.1		$	(33.0	)	$	0.3	$	18.9		$	25.0		$	(24.4	)	$	19.5

Condensed Consolidating Statements of Cash Flows
(In millions)

		Fiscal Quarter Ended April 4, 2009											Fiscal Quarter Ended April 5, 2008

			Issuers			Others			Elim- inations		Cons- olidated			Issuers			Others			Elim- inations		Cons- olidated

	Net cash (used in) provided by operating activities	$	(125.5	)	$	(13.8	)	$	$ -	$	(139.3	)	$	(74.0	)	$	7.7		$	-	$	(66.3	)

Cash flows from investing activities:
	Capital expenditures		(4.8	)		(3.5	)		-		(8.3	)		(11.9	)		(10.6	)		-		(22.5	)
	Net proceeds from sale of interest in Australian joint venture		-			-			-		-			-			0.3			-		0.3

	Net cash used in investing activities		(4.8	)		(3.5	)		-		(8.3	)		(11.9	)		(10.3	)		-		(22.2	)

Cash flows from financing activities:
	Net increase in short-term borrowings		9.0			-			-		9.0			-			-			-		-
	Dividends paid		(4.2	)		-			-		(4.2	)		(12.0	)		-			-		(12.0	)
	Principal payments on capital leases		-			(0.9	)		-		(0.9	)		(0.2	)		(1.0	)		-		(1.2	)

	Net cash provided by (used in) financing activities		4.8			(0.9	)		-		3.9			(12.2	)		(1.0	)		-		(13.2	)

Effect of exchange rates on cash			-			(0.3	)		-		(0.3	)		(0.2	)		(1.3	)		-		(1.5	)

Net decrease in cash and cash equivalents			(125.5	)		(18.5	)		-		(144.0	)		(98.3	)		(4.9	)		-		(103.2	)
Cash and cash equivalents, beginning			318.4			19.9			-		338.3			264.0			38.8			-		302.8

Cash and cash equivalents, ending		$	192.9		$	1.4		$	-	$	194.3		$	165.7		$	33.9		$	-	$	199.6

SUBSEQUENT EVENTS

On April 1, 2009, we commenced a cash tender offer to purchase any and all of our outstanding 4.250% Senior Notes due 2009 (the "2009 Notes"), as well as a consent solicitation to amend the indenture (the "Indenture") governing our outstanding 2009 Notes, our 5.125% Senior Notes due 2014 and our 6.125% Senior Notes due 2034 (collectively, the "Notes"). The purpose of the consent solicitation was to receive the consent of holders of at least a majority in principal amount of the Notes outstanding (the "Required Consents") for proposed amendments to the Indenture to provide for a carveout to the lien covenant, for liens incurred in connection with the new senior secured credit facility described above (the "Amendments"). We received the Required Consents on April 15, 2009; consequently, the Amendments will become operative upon payment of the consent fee to each validly consenting holder of the Notes, and will be binding on all holders, including non-consenting holders of Notes. The tender offer will expire in early May 2009. The consideration for each $1,000 principal amount of 2009 Notes validly tendered and not withdrawn pursuant to the tender offer will be $980, and the consideration for each $1,000 principal amount of Notes with respect to which holders validly delivered and did not revoke their consent pursuant to the consent solicitation will be $20.00.

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NEW ACCOUNTING STANDARDS

In April 2009, the FASB issued FASB Staff Position No. FAS 107-1 and APB 28-1, "Interim Disclosures about Fair Value of Financial Instruments," which requires disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This Staff Position is effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009.

In April 2009, the FASB issued FASB Staff Position No. FAS 115-2 and FAS 124-2, "Recognition and Presentation of Other-Than-Temporary Impairments," which amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. This Staff Position is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The adoption of this Staff Position did not have a material effect on our operations.

We have elected to adopt both Staff Positions as of April 4, 2009.

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 14 week periods ended April 4, 2009 (hereinafter referred to as the "first fiscal quarter of 2009") and April 5, 2008 (hereinafter referred to as the "first fiscal quarter of 2008") and our liquidity and capital resources. The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements included elsewhere herein.

Executive Overview

We design, contract for the manufacture of and market a broad range of women's collection sportswear, suits and dresses, casual sportswear and jeanswear for women and children, and women'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 and several e-commerce web sites. 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.

During 2009 to date, the following significant events took place:

as a result of the amendments to our revolving credit facility expiring on May 16, 2010, Standard & Poor's downgraded our senior unsecured debt ratings from BB- to B+ on January 6, 2009, and Moody's downgraded our senior unsecured debt ratings from Ba2 to Ba3 on January 8, 2009;
on April 1, 2009, we commenced a cash tender offer to purchase any and all of our outstanding 4.250% Senior Notes due 2009 (the "2009 Notes"), as well as a consent solicitation to amend the indenture governing our 2009 Notes, our 5.125% Senior Notes due 2014 and our 6.125% Senior Notes due 2034;
we have decided to close approximately 225 underperforming retail stores by December 31, 2010;
on April 2, 2009, we announced the launch of our www.anneklein.com e-commerce web site; and
on April 16, 2009, we announced the launch of the Rachel Rachel Roy collection of affordable contemporary sportswear, footwear and accessories, that will debut in August 2009 exclusively at select Macy's Inc. stores nationwide and on www.macys.com.

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Retail store closings

We began 2009 with 1,017 retail locations. During the fiscal quarter ended April 4, 2009, we decided to close approximately 225 underperforming retail locations by the end of 2010, of which 17 closed during the quarter. We accrued $3.1 million of termination benefits and associated employee costs for approximately 1,050 employees, including both store employees and administrative support personnel. In connection with our decision to close these stores, we reviewed them for impairments in accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." As a result of this review, we recorded $20.4 million of impairment losses on leasehold improvements and furniture and fixtures located in the stores to be closed. These costs are reported as selling, general and administrative expenses in the retail segment.

Critical Accounting Policies

Several of our accounting policies involve significant or complex judgements and uncertainties and require us to make certain critical accounting estimates. We consider an accounting estimate to be critical if it requires us to make assumptions about matters that were highly uncertain at the time the estimate was made. The estimates with the greatest potential effect on our results of operations and financial position include the collectibility of accounts receivable, the recovery value of obsolete or overstocked inventory and the fair values of both our goodwill and intangible assets with indefinite lives. Estimates related to accounts receivable affect our wholesale better apparel, wholesale jeanswear, wholesale footwear and accessories and retail segments. Estimates related to inventory and goodwill affect our wholesale better apparel, wholesale jeanswear, wholesale footwear and accessories and retail segments. Estimates related to intangible assets with indefinite lives affect our licensing, other and eliminations segment.

For accounts receivable, we estimate the net collectibility, considering both historical and anticipated trends of trade discounts and co-op advertising deductions given to 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 test our goodwill and our trademarks for impairment on an annual basis (during our fourth fiscal quarter) and between annual tests if an event occurs or circumstances change that would reduce the fair value of an asset below its carrying value. These tests utilize discounted cash flow models to estimate fair values. These cash flow models involve several assumptions. Changes in our assumptions could materially impact our fair value estimates, and material impairment losses could result where the estimated fair values of these assets become less than their carrying amounts. Assumptions critical to our fair value estimates are: (i) discount rates used to derive the present value factors used in determining the fair value of the reporting units and trademarks; (ii) royalty rates used in our trademark valuations; (iii) projected average revenue growth rates used in the reporting unit and trademark models; and (iv) projected long-term growth rates used in the derivation of terminal values. These and other assumptions are impacted by economic conditions and expectations of management and will change in the future based on period-specific facts and circumstances. Upon our decision to close approximately 225 of our retail stores, we tested our retail segment goodwill and our trademarks for impairment. No impairment charges resulted from these tests.

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Results of Operations

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

(In millions)	Fiscal Quarter Ended
	April 4, 2009				April 5, 2008
Net sales	$	879.4	98.7	%	$	963.4	98.8	%
Licensing income		11.5	1.3			11.5	1.2
Other revenues		0.2	0.0			0.5	0.1

Total revenues		891.1	100.0			975.4	100.0
Cost of goods sold		597.8	67.1			654.7	67.1

Gross profit		293.3	32.9			320.7	32.9
Selling, general and administrative expenses		279.6	31.4			280.8	28.8

Operating income		13.7	1.5			39.9	4.1
Net interest expense and financing costs		12.9	1.4			9.7	1.0
Gain on sale of interest in Australian joint venture		-	-			0.3	0.0
Equity in loss of unconsolidated affiliate		0.3	0.0			-	-

Income before provision for income taxes		0.5	0.1			30.5	3.1
Provision for income taxes		0.2	0.0			11.0	1.1

Net income	$	0.3	0.0	%	$	19.5	2.0	%

Percentage totals may not add due to rounding.

Fiscal Quarter Ended April 4, 2009 Compared to Fiscal Quarter Ended April 5, 2008

Revenues. Total revenues for the first fiscal quarter of 2009 were $891.1 million, compared with $975.4 million for the first fiscal quarter of 2008, a decrease of 8.6%. Revenues by segment were as follows:

(In millions)		First Fiscal Quarter of 2009		First Fiscal Quarter of 2008		Increase (Decrease	)	Percent Change
Wholesale better apparel	$	291.8	$	331.5	$	(39.7	)	(12.0%	)
Wholesale jeanswear		228.2		220.6		7.6		3.4%
Wholesale footwear and accessories		218.4		252.5		(34.1	)	(13.5%	)
Retail		141.2		158.9		(17.7	)	(11.1%	)
Licensing and other		11.5		11.9		(0.4	)	(3.4%	)

Total revenues	$	891.1	$	975.4	$	(84.3	)	(8.6%	)

Wholesale better apparel revenues decreased $39.7 million, primarily due to reduced shipments of our Anne Klein, Jones New York Sport, Jones New York and Nine West products due to decreased consumer spending as a result of the general economic downturn, although we experienced decreased orders for nearly all better apparel product lines. Shipments of our Evan Picone suit and dress products increased based on the performance of these brands at retail.

Wholesale jeanswear revenues increased $7.6 million. Shipments of our l.e.i. products to Wal-Mart Stores Inc. ("Walmart") were partially offset by reduced shipments of our Energie product line as a result of the general economic downturn and a $15.4 million reduction of shipments of product lines that we are discontinuing due to low long-term growth potential (including Jeanstar, Erika, Behold, Grane Girl and Code of Ethics).

Wholesale footwear and accessories revenues decreased $34.1 million. We experienced decreased orders for nearly all our footwear, handbag and accessories products due to decreased consumer spending as a result of the general economic downturn and $4.9 million of lost revenues due to the bankruptcy of several significant customers during the second half of 2008. We also experienced a reduction in sales in our international business due to the global economic conditions in Asia, Canada, Turkey and the bankruptcy of our United Kingdom licensee.

Retail revenues decreased $17.7 million, primarily due to a 10.6% decline in comparable store sales ($14.6 million) resulting from decreased consumer spending relating to current economic conditions, with

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the balance related to operating fewer stores in the current period. Comparable stores are those that have been open for a full year, are not scheduled to close in the current period and are not scheduled for an expansion or downsize by more than 25% or relocation to a different street or mall. A 16.8% decrease in comparable store sales for our footwear stores ($14.9 million) and a 10.4% decrease in comparable store sales for our apparel stores ($4.6 million) were partially offset by a 101.8% increase in our comparable e-commerce business ($4.9 million). We began 2009 with 1,017 retail locations and had a net decrease of 12 locations to end the period with 1,005 locations.

Revenues for the first fiscal quarter of 2008 include $0.4 million in the licensing and other segment of service fees charged to Barneys under a short-term transition services agreement entered into with Barneys at the time of the sale of Barneys. These revenues were based on contractual monthly fees as set forth in the agreement. The agreement ended in May 2008.

Gross Profit. The gross profit margins were 32.9% for both periods.

Wholesale better apparel gross profit margins were 35.3% and 34.7% for the first fiscal quarters of 2009 and 2008, respectively. The increase was due to the product mix and lower sales to off-price retailers in the current period.

Wholesale jeanswear gross profit margins were 23.4% and 21.4% for the first fiscal quarters of 2009 and 2008, respectively. The increase is primarily due to lower levels of off-price sales in the current period and costs in the prior period related to the repositioning of l.e.i. as an exclusive brand for Walmart and the discontinuance of certain other product lines.

Wholesale footwear and accessories gross profit margins were 26.3% and 27.3% for the first fiscal quarters of 2009 and 2008, respectively. The decrease was primarily due to additional discounting across all product lines due to the current economic conditions, as well as higher overhead unit costs in our costume jewelry business due to lower volume.

Retail gross profit margins were 44.9% and 48.8% for the first fiscal quarters of 2009 and 2008, respectively. The decrease was primarily the result of higher levels of promotional activity in our stores due to the current challenging retail environment.

Selling, General and Administrative Expenses. Selling, general and administrative ("SG&A") expenses were $279.6 million in the first fiscal quarter of 2009 and $280.8 million in the first fiscal quarter of 2008.

Wholesale better apparel SG&A expenses decreased $2.4 million, primarily due to a $1.9 million decrease in distribution costs in the current period and a $1.0 million decrease in product development costs from a reduction in the number of styles offered in the current period, offset by $0.5 million of other cost increases.

Wholesale jeanswear SG&A expenses decreased $6.7 million, primarily due to a $3.4 million decrease in administrative salary and benefit costs, a $2.4 million reduction in depreciation and amortization expenses (due to accelerated depreciation in the prior period relating to discontinued brands), a $1.4 million reduction in occupancy costs due to the closing of certain facilities and $1.4 million of other cost savings, offset by $1.9 million of additional lease obligation costs recorded in the current period for a closed warehouse location.

Wholesale footwear and accessories SG&A expenses decreased $5.4 million, primarily due to reductions in salary and benefit costs ($4.4 million), travel ($1.0 million) and other administrative costs ($2.9 million) due to our cost-cutting initiatives, and reductions in style, design and sample costs ($1.5 million) and advertising costs ($1.4 million). These reductions were offset by $1.6 million of costs related to the bankruptcy of our United Kingdom footwear licensee, $1.5 million in settlements of sales and use tax audits, $1.4 million in loss accruals related to certain leased property and a $1.3 million increase in severance costs.

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Retail SG&A expenses increased $19.5 million, primarily due to $23.5 million in severance costs and asset impairments in the current period related to the closing of approximately 225 stores through the end of 2010, offset by a $1.8 million reduction in salaries and benefits due to operating fewer stores in the current period and a $1.5 million reduction of overhead costs.

SG&A expenses for the licensing, other and eliminations segment decreased $6.2 million, primarily due to lower amortization of stock options and restricted stock ($2.7 million), a difference in timing of allocation of administrative costs to our operating segments ($1.4 million), a decrease in legal fees ($0.6 million) and other cost reductions ($0.6 million). The prior period also included $0.9 million of contract-termination costs.

Operating Income. The resulting operating income for the first fiscal quarter of 2009 was $13.7 million, compared with $39.9 million for the first fiscal quarter of 2008, due to the factors described above.

Net Interest Expense. Net interest expense was $12.9 million in the first fiscal quarter of 2009, compared with $9.7 million in the first fiscal quarter of 2008. The increase was the result of lower interest income on our invested cash balances due to overall lower interest rates in the current period and higher amortization of deferred financing fees related to the amendment to our revolving credit facility on January 5, 2009.

Income Taxes. The effective income tax rate was 34.0% and 36.0% for the first fiscal quarters of 2009 and 2008, respectively. The decrease is primarily due to a greater impact of the foreign income tax differential relative to pre-tax income in 2009 than in 2008.

Net Income and Earnings Per Share. Net income was $0.3 million in the first fiscal quarter of 2009, compared with net income of $19.5 million in the first fiscal quarter of 2008. Diluted earnings per share for the first fiscal quarter of 2009 was $0.00, compared with $0.23 for the first fiscal quarter of 2008, on 3.4% fewer shares outstanding.

Liquidity and Capital Resources

Our principal capital requirements have been for working capital needs, capital expenditures, dividend payments, acquisition funding 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. We currently fund our operations primarily through cash generated by operating activities, and rely on our revolving credit facility for the issuance of trade letters of credit for the purchases of inventory and for cash borrowings as needed. As of April 4, 2009, total cash and cash equivalents were $194.3 million, a seasonal decrease of $144.0 million from the $338.3 million reported as of December 31, 2008.

Cash flows from operating activities used $139.3 million and $66.3 million in the fiscal quarters ended April 4, 2009 and April 5, 2008, respectively. The change from the prior period was primarily due to changes in working capital. Accounts receivable increased less in the current period due to the reduction in sales compared with the prior period. Inventory experienced less seasonal decreases in the current period due to increases in l.e.i. inventory related to the exclusive program with Walmart, compared with additional decreases in the prior period due to the liquidation of discontinued brands. Accounts payable used more cash in the current period due to the timing of inventory payments. We also received a $22.5 million federal tax refund in the prior period.

Cash flows from investing activities used $8.3 million and $22.2 million in the first fiscal quarters of 2009 and 2008, respectively, primarily for the purchases of property and equipment.

Cash flows from financing activities provided $3.9 million and used $13.2 million in the first fiscal quarters of 2009 and 2008, respectively. A net increase in short-term borrowings (from third-party intermediary advances to our contractors under our computerized payable settlement arrangements) was offset by a reduction in dividend payments as compared with the prior period.

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We repurchased no common stock during the first fiscal quarters of 2009 and 2008. As of April 4, 2009, $304.1 million of Board authorized repurchases was still available. We may make additional share repurchases in the future depending on, among other things, market conditions and our financial condition.

In May 2009, we expect to replace our amended revolving credit facility and our C$10.0 million unsecured line of credit in Canada with a new three-year secured revolving credit agreement (the "New Credit Facility"). We have received $600 million in commitments from lenders so far, and may request an increase of up to $50 million in the size of the New Credit Facility by obtaining additional commitments from lenders under the New Credit Facility or from other entities with the consent of the administrative agent. Under the New Credit Facility, up to the entire amount of the facility will be available for cash borrowings, with up to $400 million (assuming the overall size of the New Credit Facility is $600 million) available for trade letters of credit and up to $50 million (assuming the overall size of the New Credit Facility is $600 million) for standby letters of credit, and a subfacility available to our Canadian subsidiaries of up to $25 million for letters of credit and borrowings. Borrowings under the New Credit Facility may be used to refinance existing indebtedness, to repay the 2009 Notes, and for general corporate purposes in the ordinary course of business. Such borrowings will bear interest either based on the alternate base rate, as defined in the New Credit Facility, or based on Eurocurrency rates, each with a margin that depends on the availability remaining under the New Credit Facility. The New Credit Facility contains customary events of default.

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receivables, minus reserves determined by the joint collateral agents. If availability under the New Credit Facility falls below a certain level, we will be required to comply with a minimum fixed charge coverage ratio. The New Credit Facility also contains affirmative and negative covenants that, among other things, will limit or restrict our ability to (1) incur indebtedness, (2) create liens, (3) merge, consolidate, liquidate or dissolve, (4) make investments (including acquisitions), loans or advances, (5) sell assets, (6) enter into sale and leaseback transactions, (7) enter into swap agreements, (8) make certain restricted payments (including dividends and other payments in respect of capital stock), (9) enter into transactions with affiliates, (10) enter into restrictive agreements, and (11) amend material documents. The New Credit Facility will be secured by a first priority lien on substantially all of our personal property.

As a result of the amendments to our revolving credit facility expiring on May 16, 2010, Standard & Poor's downgraded our senior unsecured debt ratings from BB- to B+ on January 6, 2009 and Moody's downgraded our senior unsecured debt ratings from Ba2 to Ba3 on January 8, 2009. Under the amended revolving credit facility, our fees and interest rates are no longer affected by our credit rating, so further changes to our ratings will not increase our borrowing costs. However, any future downgrades could affect our ability to obtain additional funding sources.

On April 29, 2009, we announced that our Board of Directors had declared a quarterly cash dividend of $0.05 per share to all common stockholders of record as of May 15, 2009 for payment on May 29, 2009.

Economic Outlook
The current economic environment has resulted in lower consumer confidence and lower retail sales. This trend may lead to further reduced consumer spending which could affect our net sales and our future profitability. Additionally, rising costs combined with reduced consumer spending may reduce our gross profit margins. Should these factors occur, they could have a material adverse effect on our business.

Due to the current and expected future economic conditions in the United States, we may experience increased risk related to the collectibility of our accounts receivable, and we may increase our provision for doubtful accounts in the future should any of our wholesale customers experience significant financial difficulties. If such conditions lead to defaults that are individually or cumulatively significant, we could experience a material adverse impact to our financial condition, results of operations and/or liquidity.

The economic turmoil that has arisen in the credit markets and the negative effects of the economic environment on our business may negatively impact our ability to borrow funds in the future. However, we believe that available cash and cash equivalents, funds generated by operations and the New Credit Facility 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. Although there can be no assurance because of these challenging times for financial institutions, we believe that the participating banks will be willing and able to loan funds to us in accordance with their legal obligations under the New Credit Facility.

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New Accounting Standards

We have elected to adopt both Staff Positions as of April 4, 2009.

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 $608.1 million in variable rate credit facilities available at April 4, 2009, under which no cash borrowings were outstanding at April 4, 2009.

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 our Canadian subsidiary purchases a portion of its inventory from suppliers who require payment in U.S. Dollars. To minimize our exposure to changes in exchange rates between the Canadian Dollar and the U.S. Dollar, we hedge a portion of our forecasted Canadian U.S. Dollar-denominated inventory purchases. 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 offset losses and gains on the assets, liabilities, and transactions being hedged, up to the notional amount of such contracts. 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 satisfactory credit ratings, to fail to meet their obligations.

For further information see "Fair Values" and "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 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 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 our periodic SEC filings and ensuring 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

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SEC's rules and forms and that our internal controls are effective in ensuring that our financial statements are fairly presented in conformity with generally accepted accounting principles.

We have made changes to our internal controls and procedures over financial reporting to address the implementation of SAP, an enterprise resource planning ("ERP") system. SAP will integrate our operational and financial systems and expand the functionality of our financial reporting processes. We began the process of implementing SAP throughout Jones Apparel Group, Inc. and our consolidated subsidiaries during the fourth quarter of 2006. During the first fiscal quarter of 2009, no additional businesses were converted to this system. We have adequately controlled the transition to the new processes and controls, with no negative impact to our internal control environment. We expect to continue the implementation of this system to all locations over a multi-year period. As the phased implementation occurs, we will experience changes in internal control over financial reporting each quarter. We expect this ERP system to further advance our control environment by automating manual processes, improving management visibility and standardizing processes as its full capabilities are utilized.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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 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," "expect," "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, regional and international economic conditions;
lowered levels of consumer spending resulting from a general economic downturn or lower levels of consumer confidence;
the tightening of the credit markets and our ability to obtain credit on satisfactory terms;
given the uncertain economic environment, the possible unwillingness of committed lenders to meet their obligations to lend to borrowers, in general;
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 our customers;
the effects of vigorous competition in the markets in which we operate;
our ability to attract and retain qualified executives and other key personnel;
our reliance on independent foreign manufacturers;
changes in the costs of raw materials, labor, advertising and transportation;
the general inability to obtain higher wholesale prices for our products that we have experienced for many years;
the uncertainties of sourcing associated with an environment in which general quota has expired on apparel products but litigation and political activity seeking to re-impose quotas have been initiated;

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our ability to successfully implement new operational and financial computer systems; 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. We do not undertake to publicly update or revise our forward-looking statements as a result of new information, future events or otherwise.

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: April 29, 2009

By /s/ Wesley R. Card
WESLEY R. CARD
President and Chief Executive Officer

By /s/ John T. McClain
JOHN T. McCLAIN
Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description of Exhibit
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.
32^o	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.

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EX-31 2 exhibit31.htm EXHIBIT 31 Exhibit 31

EXHIBIT 31

CERTIFICATIONS

I, Wesley R. Card, 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: April 29, 2009
	/s/ Wesley R. Card Wesley R. Card President and Chief Executive Officer

I, John T. McClain, 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: April 29, 2009
	/s/ John T. McClain John T. McClain Chief Financial Officer

EX-32 3 exhibit32.htm EXHIBIT 32 Exhibit 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, 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 4, 2009 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: 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, John T. McClain, 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 4, 2009 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/ John T. McClain

Name: John T. McClain
Title: Chief Financial Officer

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