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Despite all of the changes CEO Peter Boneparth has made at Jones Apparel Group (ticker: JNY), his biggest imprint may be yet to come. Boneparth is reportedly considering the sale of Nine West. From Women's Wear Daily:

Financial sources said Nine West does about $1 billion in annual wholesale volume, and about another $900 million or so in retail sales. A sale of the entire operation could bring in at least $2 billion for Jones, some Wall Street analysts predicted... While the footwear sector is profitable, one Wall Street analyst noted it's an area of little growth. The brand, however, generates a "decent amount of cash flow," the analyst said. He applauded the possible sale of the company, noting Jones has been on a "treadmill for five years" and that streamlining the business would perhaps allow Jones to focus on apparel, its core competency. Another analyst also viewed the sale of Nine West as a "positive," pointing out that while the business is fixable, it is not really Jones' core specialty.

What are the factors weighing on Boneparth's mind and what might he do with the extra cash?

Boneparth said that the company's mind-set is to do what will "enhance shareholder value....What's going to be the thing that's going to maximize shareholder value, whether it be divestitures, acquisitions, stock buybacks, dividends, pay down debt...that's how we think."

Boneparth has made it clear in conference calls to Wall Street that Jones is looking at possible acquisitions in retail and in the contemporary sector. It is said to have eyed luxury retailer Saks Fifth Avenue last year as a complementary business to its Barneys New York operation, which it bought in December 2004 for $397.3 million. And bankers said earlier this week that Jones appears to be the leading strategic contender to purchase Kate Spade...

Proceeds from a sale of Nine West, added to the $355 million it received from Polo Ralph Lauren when Jones sold the Polo Jeans business, could give Jones a substantial war chest to use for several acquisitions or for internal growth. That would include a significant expansion of Barneys, which Jones wants to build into a $1 billion-a-year retailer.

Comment: JNY's luxury brands are doing better than its moderate labels. Offload Nine West and focus on Barneys!

JNY 1-Yr Price Performance:

Source: Jones to Give Nine West the Boot? (JNY)