<HTML><HEAD><TITLE>Form 8-K</TITLE>
<title>Exhibit 99.1</title>
</head>

<BODY>
<P align=center><FONT face="Times New Roman"><FONT size=5>UNITED STATES
SECURITIES AND EXCHANGE COMMISSION</FONT></P><FONT size=4>
<P align=center>Washington, D.C. 20549</P>
<P align=center></FONT><B><FONT size=5>Form 8-K</FONT></P>
<P align=center>CURRENT REPORT<BR>PURSUANT TO SECTION 13 OR 15(d) OF
THE<BR>SECURITIES EXCHANGE ACT OF 1934</P></B>
</FONT>
<P align=center>Date of Report (Date of earliest event reported): <BR>September
6, 2007</P>
<FONT face="Times New Roman">
<P>&nbsp;</P>
<P align=center><FONT size=5>JONES APPAREL GROUP, INC.</FONT></FONT><BR>(Exact
name of
registrant as specified in its charter)</P>
<P>&nbsp;</P>
<DIV align=center>
<CENTER>
<TABLE border=0 cellPadding=0
style="BORDER-BOTTOM: medium none; BORDER-LEFT: medium none; BORDER-RIGHT: medium none; BORDER-TOP: medium none"
width="100%" cellspacing="5">
  <TR>
    <TD vAlign=top width="34%" align="center">
      <P align=center>Pennsylvania
      <hr noshade size="1" color="#000000">
      (State or Other Jurisdiction of
      Incorporation)
    </TD>
    <TD vAlign=top width="30%" align="center">
      <P align=center>1-10746
      <hr noshade size="1" color="#000000">
      (Commission File Number)</TD>
    <TD vAlign=top width="36%" align="center">
      <P align=center>06-0935166
      <hr noshade size="1" color="#000000">
      (IRS Employer Identification
  No.)</TD></TR></TABLE></CENTER></DIV>
<div align="center">
  <center>
  <table border="0" cellpadding="8" cellspacing="5" width="100%">
    <tr>
      <td width="25%" align="center"></td>
      <td width="50%" align="center">1411 Broadway<br>
		New York, New York&nbsp; 10018
        <hr noshade size="1" color="#000000">
        (Address of principal executive offices)</td>
      <td width="25%" align="center"></td>
    </tr>
    <tr>
      <td width="25%" align="center"></td>
      <td width="50%" align="center">(212) 642-3860
        <hr noshade size="1" color="#000000">
        (Registrant's telephone number, including
area code)</td>
      <td width="25%" align="center"></td>
    </tr>
    <tr>
      <td width="25%" align="center"></td>
      <td width="50%" align="center">Not Applicable<hr noshade size="1" color="#000000">
        Former name or former address, if changed since last report</td>
      <td width="25%" align="center"></td>
    </tr>
  </table>
  </center>
</div>
<p>Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:</p>
<p>[&nbsp;&nbsp; ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)&nbsp;<br>
[&nbsp;&nbsp; ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)&nbsp;<br>
[&nbsp;&nbsp; ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))<br>
[&nbsp;&nbsp; ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))</p>
<HR>
<p><b>Item 1.01 Entry into a Material Definitive Agreement.</b></p>
<p>On September 6, 2007, Jones Apparel Group, Inc. (&quot;Jones&quot;) entered
into an accelerated share repurchase (&quot;ASR&quot;) agreement with Goldman,
Sachs &amp; Co. (&quot;Goldman&quot;). Under the ASR agreement, Jones will
repurchase $400 million of its outstanding common stock, with approximately 15.5
million shares to be received on September 12, 2007 and the remaining shares to
be received at the end of an initial valuation period and upon final settlement
of the ASR program. Final settlement of the ASR program is scheduled for no
later than July 19, 2008, and may occur earlier at the option of Goldman or
later under certain circumstances. The initial shares repurchased by Jones are
subject to adjustment if Jones were to enter into or announce certain types of
transactions. During the term of the ASR program and for approximately two weeks
after final settlement, Jones may only make repurchases of its common stock with
the consent of Goldman.</p>
<p>The foregoing summary of the ASR agreement does not purport to be complete
and is qualified in its entirety by reference to the definitive Master
Confirmation and Supplemental Confirmation, which are filed as Exhibits 10.1 and
10.2 hereto and are incorporated herein by reference.</p>
<p><b>Item 2.01 Completion of Acquisition or Disposition of Assets.</b></p>
<p>On September 6, 2007, Jones completed
the sale of its indirect wholly-owned subsidiary, Barneys New York, Inc.
(&quot;Barneys&quot;), to an affiliate of Istithmar PJSC, a Dubai based private
equity and alternative investment house (&quot;Istithmar&quot;). At the closing of the sale, Jones
received $947.5 million in cash, including $5.2 million related to estimated
working capital and capital expenditure adjustments, which is subject to certain
post-closing adjustments. Jones expects to realize estimated after-tax
proceeds, net of selling costs and transaction expenses, of $843.2 million. Jones paid an
aggregate of $49.4 million in cash for bonuses for key Barneys employees,
compensation for restricted stock held by certain employees of Barneys that was
forfeited upon the completion of the sale and other fees and costs related to the sale.</p>
<p>A copy of the press release announcing the completion of the Barneys sale and
the entry into the ASR agreement is attached as Exhibit 99.1 to this report.</p>
<P><b>Item 9.01&nbsp; Financial Statements and Exhibits.</b></P>
<P><i>(b) Pro forma financial information.</i></P>
<P>Unaudited Pro Forma Condensed Consolidated Financial Statements</P>
<P>On September 6, 2007, Jones completed the sale of Barneys to Istithmar for
$947.5 million in cash, including $5.2 million related to estimated
working capital and capital expenditure adjustments, which is subject to certain
post-closing adjustments.</P>
<P>The following unaudited pro forma consolidated balance sheet at July 7, 2007
and the unaudited pro forma consolidated statements of operations for the years
ended December 31, 2004, 2005 and 2006, and the accompanying notes thereto, have
been prepared to illustrate the effects of the sale, as discontinued operations,
on the historical financial position and results of operations of Jones. The
unaudited pro forma consolidated financial statements and related notes do not
give any effect to any utilization of cash proceeds from the sale.&nbsp; Since
the pending sale of Barneys met the criteria for discontinued operations as of
July 7, 2007, the statements of operations for the fiscal six months ended July
7, 2007 and July 1, 2006 included in Jones' Form 10-Q filed on August 14, 2007
reflected Barneys as discontinued operations.&nbsp; Accordingly, Jones has not
presented the July 7, 2007 and July 1, 2006 interim statements of operations
herein.</P>
<P>The unaudited pro forma consolidated balance sheet as of July 7, 2007 assumes
the sale of Barneys occurred as of that date.&nbsp; The unaudited pro forma
consolidated statements of operations for the years ended December 31, 2004,
2005 and 2006 assume the sale had occurred at the close of business on December 31, 2003.&nbsp; The
assumptions and adjustments are described in the accompanying notes to the
unaudited pro forma consolidated financial statements.&nbsp; The unaudited pro
forma consolidated financial statements should be read together with the
consolidated financial statements of Jones as of and for the periods ended July
7, 2007 and December 31, 2006 included in the quarterly and annual reports on
Forms 10-Q and 10-K/A (Amendment No. 2) for those respective periods.&nbsp;
These pro forma statements do not necessarily reflect the results of operations
or financial position of Jones that would have resulted had the transaction
actually been consummated as of such dates and are not necessarily indicative of
the future results of operations or the future financial position of Jones.</P>
<P align="center">- 2 -</P>
<hr noshade size="1" color="#000000">
<p>Jones Apparel Group, Inc.<br>
Unaudited Pro Forma Consolidated Statements of Operations<br>
(All amounts in millions except per share data)</p>
<table cellSpacing="0" width="100%" border="0">
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Year Ended December 31,
        2006</font>
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="center" width="15%"><font size="2">Historical&nbsp;</font>
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="center" width="15%"><font size="2">Discontinued<br>
        Operations</font>
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="center" width="15%"><font size="2">Pro Forma<br>
        Continuing<br>
        Operations</font>
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#f0f0f0"><font size="2">Net sales</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0"><font size="2">$
        4,669.9&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0"><font size="2">$(655.1)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0"><font size="2">$
        4,014.8&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Licensing income (net)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">51.8&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(0.7)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">51.1&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb"><font size="2">Service
        and other revenue</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">21.1&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">-&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">21.1&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb"><font size="2">Total
        revenues</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">4,742.8&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">(655.8)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">4,087.0&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Cost of goods sold</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">3,031.3&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(357.1)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">2,674.2&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Gross profit</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">1,711.5&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(298.7)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">1,412.8&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb"><font size="2">Selling,
        general and administrative expenses</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">1,341.7&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">(245.4)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">1,096.3&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Loss on sale of Polo Jeans
        Company business</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">45.1&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">-&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">45.1&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb"><font size="2">Trademark
        impairments</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">50.2&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">-&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">50.2&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Goodwill impairment</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">441.2&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">-&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">441.2&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Operating loss</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(166.7)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(53.3)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(220.0)</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb"><font size="2">Interest
        income</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">3.5&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">-&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">3.5&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Interest expense and
        financing costs</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">58.2&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(7.7)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">50.5&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb"><font size="2">Gain on
        sale of stock in Rubicon Retail Limited</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">17.4&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">-&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">17.4&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Equity in earnings of
        unconsolidated affiliates</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">4.5&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">-&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">4.5&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Loss before provision for
        income taxes</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(199.5)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(45.6)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(245.1)</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb"><font size="2">Benefit
        for income taxes</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">(53.5)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">(16.6)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">(70.1)</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb"><font size="2">Loss before cumulative effect of change in accounting principle</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">(146.0)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">(29.0)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">(175.0)</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Cumulative effect of change
        in accounting for share-based payments, net of tax</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">1.9&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">-&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">1.9&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Net loss</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">$(144.1)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">$(29.0)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">$(173.1)</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb"><font size="2">&nbsp;&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="5">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="5">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="5">
      </td>
    </tr>
</table>
<table cellSpacing="0" width="100%" border="0">
    <tr>
      <td vAlign="bottom" width="55%" colSpan="3"><font size="2">(Loss) earnings
        per share</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%"></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" width="53%" colSpan="2" bgcolor="#EBEBEB"><font size="2">Basic</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%"></td>
      <td vAlign="bottom" width="2%"></td>
      <td vAlign="bottom" width="51%"><font size="2">Loss before cumulative
        effect of change in accounting principle</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">$(1.32)</font></td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">$(1.58)</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" width="51%" bgcolor="#EBEBEB"><font size="2">Cumulative
        effect of change in accounting for share-based payments, net of tax</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">0.02&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">0.02&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%"></td>
      <td vAlign="bottom" width="2%"></td>
      <td vAlign="bottom" width="51%"></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" width="51%" bgcolor="#EBEBEB"><font size="2">Basic
        loss per share</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$(1.30)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$(1.56)</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%"></td>
      <td vAlign="bottom" width="53%" colSpan="2"></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="5">
      </td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="5">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" width="53%" colSpan="2" bgcolor="#EBEBEB"><font size="2">Diluted</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" width="2%"></td>
      <td vAlign="bottom" width="51%"><font size="2">Loss before cumulative
        effect of change in accounting principle</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">$(1.32)</font></td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">$(1.58</font><font size="2">)</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" width="51%" bgcolor="#EBEBEB"><font size="2">Cumulative
        effect of change in accounting for share-based payments, net of tax</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">0.02&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">0.02&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%"></td>
      <td vAlign="bottom" width="2%"></td>
      <td vAlign="bottom" width="51%"></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" width="51%" bgcolor="#EBEBEB"><font size="2">Diluted
        loss per share</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$(1.30)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$(1.56</font><font size="2">)</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%"></td>
      <td vAlign="bottom" width="53%" colSpan="2"></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="5">
      </td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="5">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" width="53%" colSpan="2" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" colspan="3"><font size="2">Weighted
        average common shares outstanding</font></td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%"></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" width="53%" bgcolor="#EBEBEB" colspan="2"><font size="2">Basic</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">110.6&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">110.6&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%"></td>
      <td vAlign="bottom" width="53%" colspan="2"><font size="2">Diluted</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">110.6&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">110.6&nbsp;</font></td>
    </tr>
</table>
<p>See accompanying notes to pro forma consolidated financial statements</p>
<p align="center">- 3 -</p>
<hr noshade size="1" color="#000000">
<p>Jones Apparel Group, Inc.<br>
Unaudited Pro Forma Consolidated Statements of Operations<br>
(All amounts in millions except per share data)</p>
<table cellSpacing="0" width="100%" border="0">
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Year Ended December 31,
        2005</font>
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="center" width="15%"><font size="2">Historical&nbsp;</font>
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="center" width="8%"><font size="2">Discontinued<br>
        Operations</font>
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="center" width="7%"><font size="2">Pro Forma<br>
        Continuing<br>
        Operations&nbsp;</font>
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#f0f0f0"><font size="2">Net sales</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0"><font size="2">$
        5,014.6&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0"><font size="2">$(541.3)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0"><font size="2">$
        4,473.3&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Licensing income (net)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">59.6&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(0.7)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">58.9&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Total revenues</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">5,074.2&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(542.0)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">4,532.2&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgcolor="#EBEBEB"><font size="2">Cost of
        goods sold</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">3,243.8&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">(293.4)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">2,950.4&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgcolor="#EBEBEB"><font size="2">Gross
        profit</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">1,830.4&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">(248.6)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">1,581.8&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Selling, general and
        administrative expenses</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">1,333.2&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(204.9)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">1,128.3&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Operating income</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">497.2&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(43.7)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">453.5&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb"><font size="2">Interest
        income</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">1.1&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">-&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">1.1&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Interest expense and
        financing costs</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">76.2&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(5.2)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">71.0&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgcolor="#EBEBEB"><font size="2">Equity in
        earnings of unconsolidated affiliates</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">3.2&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">-&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">3.2&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgcolor="#EBEBEB"><font size="2">I</font><font size="2">ncome
        before provision for income taxes</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">425.3&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">(38.5)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">386.8&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Provision&nbsp; for income
        taxes</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">151.0&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(17.0)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">134.0&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Net income</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">$ 274.3&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">$(21.5)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">$ 252.8&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb"><font size="2">&nbsp;&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="5">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="5">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="5">
      </td>
    </tr>
</table>
<table cellSpacing="0" width="100%" border="0">
    <tr>
      <td vAlign="bottom" width="55%" colSpan="2"><font size="2">Earnings per
        share</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%"></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" width="53%" bgcolor="#EBEBEB"><font size="2">Basic</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$2.33&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$2.15&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%"></td>
      <td vAlign="bottom" width="53%"><font size="2">Diluted</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">$2.30&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">$2.12&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" width="53%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" colspan="2"><font size="2">Weighted
        average common shares outstanding</font></td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%"></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" width="53%" bgcolor="#EBEBEB"><font size="2">Basic</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">118.0&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">118.0&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%"></td>
      <td vAlign="bottom" width="53%"><font size="2">Diluted</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">119.2&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">119.2&nbsp;</font></td>
    </tr>
</table>
<p>See accompanying notes to pro forma consolidated financial statements</p>
<p align="center">- 4 -</p>
<hr noshade size="1" color="#000000">
<p align="left">Jones Apparel Group, Inc.<br>
Unaudited Pro Forma Consolidated Statements of Operations<br>
(All amounts in millions except per share data)<br>
</p>
<table cellSpacing="0" width="100%" border="0">
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Year Ended December 31,
        2004</font>
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="center" width="15%"><font size="2">Historical&nbsp;</font>
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="center" width="8%"><font size="2">Discontinued<br>
        Operations</font>
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="center" width="7%"><font size="2">Pro Forma<br>
        Continuing<br>
        Operations&nbsp;</font>
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#f0f0f0"><font size="2">Net sales</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0"><font size="2">$
        4,592.6&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0"><font size="2">$(19.4)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0"><font size="2">$
        4,573.2&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Licensing income (net)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">57.1&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">-&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">57.1&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Total revenues</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">4,649.7&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(19.4)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">4,630.3&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgcolor="#EBEBEB"><font size="2">Cost of
        goods sold</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">2,944.4&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">(10.5)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">2,933.9&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgcolor="#EBEBEB"><font size="2">Gross
        profit</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">1,705.3&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">(8.9)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">1,696.4&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Selling, general and
        administrative expenses</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">1,176.7&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(5.8)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">1,170.9&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb"><font size="2">Trademark
        impairments</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">0.2&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">-&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">0.2&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgcolor="#EBEBEB"><font size="2">Operating
        income</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">528.4&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">(3.1)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">525.3&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Interest income</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">1.9&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">-&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">1.9&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgcolor="#EBEBEB"><font size="2">Interest
        expense and financing costs</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">51.2&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">(0.1)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">51.1&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">Equity in earnings of
        unconsolidated affiliates</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">3.8&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">-&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">3.8&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">I</font><font size="2">ncome
        before provision for income taxes</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">482.9&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">(3.0)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">479.9&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb"><font size="2">Provision&nbsp;
        for income taxes</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">181.1&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">(0.6)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">180.5&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="1">
      </td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgcolor="#EBEBEB"><font size="2">Net
        income</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$
        301.8&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$(2.4)</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$
        299.4&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%"><font size="2">&nbsp;&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="5">
      </td>
      <td vAlign="bottom" align="right" width="15%">
        <hr color="#000000" noShade SIZE="5">
      </td>
      <td vAlign="bottom" align="left" width="5%">
        <hr color="#000000" noShade SIZE="5">
      </td>
    </tr>
</table>
<table cellSpacing="0" width="100%" border="0">
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#f0f0f0" colSpan="2"><font size="2">E</font><font size="2">arnings
        per share</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0">&nbsp;</td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%"></td>
      <td vAlign="bottom" width="53%"><font size="2">Basic</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">$2.44&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">$2.42&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" width="53%" bgcolor="#EBEBEB"><font size="2">Diluted</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$2.39&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$2.37&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" width="53%"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%"></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="55%" bgColor="#ebebeb" colspan="2"><font size="2">Weighted
        average common shares outstanding</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">&nbsp;</td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%"><font size="2">&nbsp;</font></td>
      <td vAlign="bottom" width="53%"><font size="2">Basic</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">123.6&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%"></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">123.6&nbsp;</font></td>
    </tr>
    <tr>
      <td vAlign="bottom" width="2%" bgColor="#ebebeb">&nbsp;</td>
      <td vAlign="bottom" width="53%" bgColor="#ebebeb"><font size="2">Diluted</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">126.5&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">126.5&nbsp;</font></td>
    </tr>
</table>
<p>See accompanying notes to pro forma consolidated financial statements</p>
<p align="center">- 5 -</p>
<hr noshade size="1" color="#000000">
<font size="3">Jones Apparel Group, Inc.&nbsp;<br>
Unaudited Pro Forma Consolidated Balance Sheets<br>
(All amounts in millions except per share data)<br>
&nbsp;&nbsp;</font>
<div align="left">
  <table cellSpacing="0" width="100%" border="0">
      <tr>
        <td width="55%" colSpan="2" valign="bottom"><font size="2">At July 7,
          2007</font><font size="3">
          <hr noshade size="1" color="#000000">
          </td>
        </font>
        <td vAlign="bottom" align="center" width="15%"><font size="2">Historical&nbsp;</font>
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="center" width="15%" colspan="2"><font size="2">Pro
          Forma&nbsp;<br>
          Adjustments&nbsp;</font>
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="center" width="15%"><font size="2">Pro Forma&nbsp;</font>
          <hr color="#000000" noShade SIZE="1">
        </td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" bgColor="#f0f0f0" colSpan="2"><font size="2">ASSETS&nbsp;</font></td>
        <font size="3">
        <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0">&nbsp;</td>
        <td vAlign="bottom" align="right" width="12%" bgColor="#f0f0f0">&nbsp;</td>
        <td vAlign="bottom" align="left" width="3%" bgColor="#f0f0f0">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0">&nbsp;</td>
        </tr>
      </font>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2"><font size="2">CURRENT
          ASSETS:&nbsp;</font></td>
        <font size="3">
        <td vAlign="bottom" align="right" width="15%"></td>
        <td vAlign="bottom" align="right" width="12%"></td>
        <td vAlign="bottom" align="left" width="3%"></td>
        <td vAlign="bottom" align="right" width="15%"></td>
        </tr>
        <tr>
          <td vAlign="bottom" width="3%" bgColor="#f0f0f0">&nbsp;</td>
        </font>
        <td vAlign="bottom" width="52%" bgColor="#f0f0f0"><font size="2">Cash
          and cash equivalents</font></td>
        <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0"><font size="2">$&nbsp;
          53.6&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%" bgColor="#f0f0f0"><font size="2">$
          898.1&nbsp;</font></td>
        <td vAlign="bottom" align="left" width="3%" bgColor="#f0f0f0"><font size="2">(1)</font></td>
        <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0"><font size="2">$&nbsp;
          951.7&nbsp;</font></td>
      </tr>
      <font size="3">
      <tr>
        <td vAlign="bottom" width="3%"></td>
      </font>
      <td vAlign="bottom" width="52%"><font size="2">Accounts receivable</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">374.5&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="12%"></td>
      <td vAlign="bottom" align="left" width="3%"></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">374.5&nbsp;</font></td>
      </tr>
      <font size="3">
      <tr>
        <td vAlign="bottom" width="3%" bgColor="#f0f0f0">&nbsp;</td>
      </font>
      <td vAlign="bottom" width="52%" bgColor="#f0f0f0"><font size="2">Inventories</font></td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0"><font size="2">535.7&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="12%" bgColor="#f0f0f0">&nbsp;</td>
      <td vAlign="bottom" align="left" width="3%" bgColor="#f0f0f0">&nbsp;</td>
      <td vAlign="bottom" align="right" width="15%" bgColor="#f0f0f0"><font size="2">535.7&nbsp;</font></td>
      </tr>
      <font size="3">
      <tr>
        <td vAlign="bottom" width="3%"></td>
      </font>
      <td vAlign="bottom" width="52%"><font size="2">Assets held for sale</font></td>
      <font size="3">
      <td vAlign="bottom" align="right" width="15%"><font size="2">6</font></font><font size="2">45.3&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="12%"><font size="2">(611.3)</font></td>
      <td vAlign="bottom" align="left" width="3%"><font size="2">(2)</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">34.0</font><font size="2">&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%" bgColor="#ebebeb">&nbsp;</td>
        <td vAlign="bottom" width="52%" bgColor="#ebebeb"><font size="2">Deferred
          taxes</font></td>
        <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">68.8&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%" bgColor="#ebebeb">&nbsp;</td>
        <td vAlign="bottom" align="left" width="3%" bgColor="#ebebeb">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">68.8&nbsp;</font></td>
      </tr>
      <font size="3">
      <tr>
        <td vAlign="bottom" width="3%">&nbsp;</td>
      </font>
      <td vAlign="bottom" width="52%"><font size="2">Prepaid expenses and other
        current assets</font></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">60.6&nbsp;</font></td>
      <td vAlign="bottom" align="right" width="12%"></td>
      <td vAlign="bottom" align="left" width="3%"></td>
      <td vAlign="bottom" align="right" width="15%"><font size="2">60.6&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%" bgColor="#ebebeb">&nbsp;</td>
        <td vAlign="bottom" width="52%" bgColor="#ebebeb">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="right" width="12%" bgColor="#ebebeb">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="left" width="3%" bgColor="#ebebeb">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb">
          <hr color="#000000" noShade SIZE="1">
        </td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%"></td>
        <td vAlign="bottom" width="52%"><font size="2">TOTAL CURRENT ASSETS</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">1,738.5&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%"><font size="2">286.8&nbsp;</font></td>
        <td vAlign="bottom" align="left" width="3%"></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">2,025.3&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" bgColor="#ebebeb" colSpan="2"><font size="2">PROPERTY,
          PLANT AND EQUIPMENT, at cost, less accumulated depreciation and
          amortization of $418.9</font></td>
        <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">283.3&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%" bgColor="#ebebeb">&nbsp;</td>
        <td vAlign="bottom" align="left" width="3%" bgColor="#ebebeb">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">283.3&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2"><font size="2">GOODWILL</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">1,051.9&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%"></td>
        <td vAlign="bottom" align="left" width="3%"></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">1,051.9&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" bgColor="#ebebeb" colSpan="2"><font size="2">OTHER
          INTANGIBLES, at cost, less accumulated&nbsp;amortization</font></td>
        <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">626.6&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%" bgColor="#ebebeb">&nbsp;</td>
        <td vAlign="bottom" align="left" width="3%" bgColor="#ebebeb">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgColor="#ebebeb"><font size="2">626.6&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="top" width="55%" colSpan="2"><font size="2">DEFERRED
          TAXES</font></td>
        <td vAlign="top" align="right" width="15%"><font size="2">14.5&nbsp;</font></td>
        <td vAlign="top" align="right" width="12%"><font size="2">107.9&nbsp;<br>
          (107.9)</font></td>
        <td vAlign="top" align="left" width="3%"><font size="2">(4)<br>
          (5)</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">14.5&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2" bgcolor="#EBEBEB"><font size="2">OTHER
          ASSETS</font></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">52.9&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">52.9&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2"></td>
        <td vAlign="bottom" align="right" width="15%">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="right" width="12%">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="left" width="3%"></td>
        <td vAlign="bottom" align="right" width="15%">
          <hr color="#000000" noShade SIZE="1">
        </td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$
          3,767.7&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB"><font size="2">$
          286.8&nbsp;</font></td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$
          4,054.5&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2"></td>
        <td vAlign="bottom" align="right" width="15%">
          <hr color="#000000" noShade SIZE="5">
        </td>
        <td vAlign="bottom" align="right" width="12%">
          <hr color="#000000" noShade SIZE="5">
        </td>
        <td vAlign="bottom" align="left" width="3%"></td>
        <td vAlign="bottom" align="right" width="15%">
          <hr color="#000000" noShade SIZE="5">
        </td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2" bgcolor="#EBEBEB"><font size="2">LIABILITIES
          AND STOCKHOLDERS' EQUITY</font></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2"><font size="2">CURRENT
          LIABILITIES:</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%"><font size="2">&nbsp;</font></td>
        <td vAlign="bottom" align="left" width="3%"></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" width="52%" bgcolor="#EBEBEB"><font size="2">Short-term
          borrowings</font></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$&nbsp;184.1&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$&nbsp;184.1&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%"></td>
        <td vAlign="bottom" width="52%"><font size="2">Current portion of
          capital lease obligations</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">3.9&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%"></td>
        <td vAlign="bottom" align="left" width="3%"></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">3.9&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" width="52%" bgcolor="#EBEBEB"><font size="2">Accounts
          payable</font></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">219.1&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">219.1&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%"></td>
        <td vAlign="bottom" width="52%"><font size="2">Liabilities related to
          assets held for sale</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">165.9&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%"><font size="2">(159.9)</font></td>
        <td vAlign="bottom" align="left" width="3%"><font size="2">(2)</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">6.0&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" width="52%" bgcolor="#EBEBEB"><font size="2">Income
          taxes payable</font></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">5.9&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB"><font size="2">54.9&nbsp;</font></td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB"><font size="2">(3)</font></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">60.8&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%"><font size="2">&nbsp;</font></td>
        <td vAlign="bottom" width="52%"><font size="2">Accrued employee
          compensation</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">39.4&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%"></td>
        <td vAlign="bottom" align="left" width="3%"></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">39.4&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" width="52%" bgcolor="#EBEBEB"><font size="2">Accrued
          expenses and other current liabilities</font></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">87.8&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">87.8&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%"></td>
        <td vAlign="bottom" width="52%"></td>
        <td vAlign="bottom" align="right" width="15%">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="right" width="12%">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="left" width="3%"></td>
        <td vAlign="bottom" align="right" width="15%">
          <hr color="#000000" noShade SIZE="1">
        </td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" width="52%" bgcolor="#EBEBEB"><font size="2">TOTAL
          CURRENT LIABILITIES</font></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">706.1&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB"><font size="2">(105.0)</font></td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">601.1&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2"></td>
        <td vAlign="bottom" align="right" width="15%">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="right" width="12%">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="left" width="3%"></td>
        <td vAlign="bottom" align="right" width="15%">
          <hr color="#000000" noShade SIZE="1">
        </td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2" bgcolor="#EBEBEB"><font size="2">NONCURRENT
          LIABILITIES:</font></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">&nbsp;</td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%"><font size="2">&nbsp;</font></td>
        <td vAlign="bottom" width="52%"><font size="2">Long-term debt</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">749.3&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%"></td>
        <td vAlign="bottom" align="left" width="3%"></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">749.3&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" width="52%" bgcolor="#EBEBEB"><font size="2">Obligations
          under capital leases</font></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">29.7&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">29.7&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%">&nbsp;</td>
        <td vAlign="bottom" width="52%"><font size="2">Other</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">73.0&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%">&nbsp;</td>
        <td vAlign="bottom" align="left" width="3%">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">73.0&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" width="52%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">
          <hr color="#000000" noShade SIZE="1">
        </td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%">&nbsp;</td>
        <td vAlign="bottom" width="52%"><font size="2">TOTAL
          NONCURRENT LIABILITIES</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">852.0&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%"><font size="2">&nbsp;</font></td>
        <td vAlign="bottom" align="left" width="3%">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">852.0&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" width="52%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">
          <hr color="#000000" noShade SIZE="1">
        </td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%">&nbsp;</td>
        <td vAlign="bottom" width="52%"><font size="2">TOTAL
          LIABILITIES</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">1,558.1&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%"><font size="2">(105.0)</font></td>
        <td vAlign="bottom" align="left" width="3%">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">1,453.1&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB">
          <hr color="#000000" noShade SIZE="1">
        </td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2"><font size="2">COMMITMENTS
          AND CONTINGENCIES</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">-&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%"><font size="2">&nbsp;</font></td>
        <td vAlign="bottom" align="left" width="3%">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">-&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2" bgcolor="#EBEBEB"><font size="2">STOCKHOLDERS'
          EQUITY:</font></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%">&nbsp;</td>
        <td vAlign="bottom" width="52%"><font size="2">Preferred
          stock, $.01 par value - shares authorized 1.0;&nbsp; none issued</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">-&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%"><font size="2">&nbsp;</font></td>
        <td vAlign="bottom" align="left" width="3%">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">-&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" width="52%" bgcolor="#EBEBEB"><font size="2">Common stock, $.01 par
          value - shares authorized 200.0; issued 154.3</font></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">1.5&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">1.5&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%">&nbsp;</td>
        <td vAlign="bottom" width="52%"><font size="2">Additional
          paid-in capital</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">1,344.3&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%"><font size="2">(9.8)</font></td>
        <td vAlign="bottom" align="left" width="3%"><font size="2">(6)</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">1,334.5&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="top" width="3%" bgcolor="#EBEBEB"></td>
        <td vAlign="top" width="52%" bgcolor="#EBEBEB"><font size="2">Retained earnings</font></td>
        <td vAlign="top" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">2,196.8&nbsp;</font></td>
        <td vAlign="top" align="right" width="12%" bgcolor="#EBEBEB"><font size="2">107.9&nbsp;<br>
          294.5&nbsp;</font></td>
        <td vAlign="top" align="left" width="3%" bgcolor="#EBEBEB"><font size="2">(4)<br>
          (7)</font></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">2,599.2&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%">&nbsp;</td>
        <td vAlign="bottom" width="52%"><font size="2">Accumulated
          other comprehensive loss</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">(2.6)</font></td>
        <td vAlign="bottom" align="right" width="12%"><font size="2">(0.8)</font></td>
        <td vAlign="bottom" align="left" width="3%"><font size="2">(8)</font></td>
        <td vAlign="bottom" align="right" width="15%"><font size="2">(3.4)</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%" bgcolor="#EBEBEB"><font size="2">&nbsp;</font></td>
        <td vAlign="bottom" width="52%" bgcolor="#EBEBEB"><font size="2">Treasury stock, 45.3
          shares, at cost</font></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">(1,330.4)</font></td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">(1,330.4)</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%">&nbsp;</td>
        <td vAlign="bottom" width="52%">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="right" width="12%">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="left" width="3%">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%">
          <hr color="#000000" noShade SIZE="1">
        </td>
      </tr>
      <tr>
        <td vAlign="bottom" width="3%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" width="52%" bgcolor="#EBEBEB"><font size="2">TOTAL STOCKHOLDERS'
          EQUITY</font></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">2,209.6&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB"><font size="2">391.8&nbsp;</font></td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">2,601.4&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="right" width="12%">
          <hr color="#000000" noShade SIZE="1">
        </td>
        <td vAlign="bottom" align="left" width="3%">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%">
          <hr color="#000000" noShade SIZE="1">
        </td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$ 3,767.7&nbsp;</font></td>
        <td vAlign="bottom" align="right" width="12%" bgcolor="#EBEBEB"><font size="2">$286.8&nbsp;</font></td>
        <td vAlign="bottom" align="left" width="3%" bgcolor="#EBEBEB"></td>
        <td vAlign="bottom" align="right" width="15%" bgcolor="#EBEBEB"><font size="2">$
          4,054.5&nbsp;</font></td>
      </tr>
      <tr>
        <td vAlign="bottom" width="55%" colSpan="2">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%">
          <hr color="#000000" noShade SIZE="5">
        </td>
        <td vAlign="bottom" align="right" width="12%">
          <hr color="#000000" noShade SIZE="5">
        </td>
        <td vAlign="bottom" align="left" width="3%">&nbsp;</td>
        <td vAlign="bottom" align="right" width="15%">
          <hr color="#000000" noShade SIZE="5">
        </td>
      </tr>
  </table>
</div>
<p align="justify">See accompanying notes to pro forma consolidated financial
statements</p>
<p align="center">- 6 -</p>
<hr noshade size="1" color="#000000">
<b>

<p align="center">NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS</p>

<p>BASIS OF PRESENTATION</p>
</b>

<p>As previously reported, on August 8, 2007, Jones entered into an amended and
restated definitive stock purchase agreement among Jones, its wholly owned
subsidiary Jones Apparel Group Holdings, Inc., its indirect wholly owned
subsidiary Barneys and affiliates of Istithmar PJSC, a Dubai-based private
equity and alternative investment house.&nbsp; The Amended and Restated Stock Purchase
Agreement provides for Jones to sell Barneys to an affiliate of Istithmar PJSC for $942.3
million in cash, subject to certain purchase price adjustments.</p>
<p>On September 6, 2007, Jones completed the sale of Barneys to an affiliate of
Istithmar PJSC.&nbsp;
At the closing of the sale, Jones received $947.5 million of cash, including
$5.2 million related to estimated working capital and capital expenditure
adjustments, which is subject to certain post-closing adjustments.&nbsp; Jones
expects to realize estimated after-tax proceeds, net of selling costs and
transaction expenses, of $843.2 million.&nbsp; Jones paid an aggregate of $49.4 million
in cash for bonuses for key Barneys employees, compensation for restricted stock
held by certain employees of Barneys that was forfeited upon the completion of
the sale and other fees and costs related to the sale.</p>
<p align="justify"><b>PRO FORMA ADJUSTMENTS</b></p>
<p align="justify">The historical Consolidated Statements of Operations for 2004
through 2006 have been adjusted to report the
        operating results of Barneys as discontinued operations for the periods
presented in accordance with the provisions
of SFAS No. 144, &quot;Accounting for the Impairment or Disposal of Long-Lived
Assets.&quot;&nbsp; Interest
        expense has been allocated
to discontinued operations based on the weighted-average monthly borrowing rate
under Jones' senior credit facilities applied to the average net monthly balance of
funds that have been advanced to Barneys.</p>
<p align="justify">The historical Consolidated Balance Sheet at July 7, 2007 has been
adjusted to give effect to pro forma events that are directly attributable to
the sale (including legal and investment banker fees) and are factually supportable.&nbsp;
The balance sheet pro
forma adjustments are as follows (all amounts in millions).</p>
<div align="left">
  <table border="0" cellpadding="5" cellspacing="0" width="100%">
    <tr>
      <td width="4%" valign="top" bgcolor="#EBEBEB">(1)</td>
      <td width="96%" valign="top" colspan="4" bgcolor="#EBEBEB">To record the net cash received
        upon the sale of Barneys, as follows:</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom">&nbsp;</td>
      <td width="62%" valign="bottom">Gross cash proceeds, including $5.2
        related to estimated working capital and capital expenditure
        adjustments</td>
      <td width="10%" valign="bottom" align="right">$947.5&nbsp;</td>
      <td width="20%" valign="bottom" align="right">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;</td>
      <td width="62%" valign="bottom" bgcolor="#EBEBEB">Investment banker, legal, accounting and
        other transaction costs</td>
      <td width="10%" valign="bottom" align="right" bgcolor="#EBEBEB">(16.7)</td>
      <td width="20%" valign="bottom" align="right" bgcolor="#EBEBEB">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom">&nbsp;</td>
      <td width="62%" valign="bottom">Cash payments to Barneys
        employees in lieu of restricted stock vesting, bonus payments and other
        employee costs
        associated with the sale</td>
      <td width="10%" valign="bottom" align="right">(32.7)</td>
      <td width="20%" valign="bottom" align="right">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;</td>
      <td width="62%" valign="bottom" bgcolor="#EBEBEB"></td>
      <td width="10%" valign="bottom" align="right" bgcolor="#EBEBEB">
        <hr noshade size="1" color="#000000">
      </td>
      <td width="20%" valign="bottom" align="right" bgcolor="#EBEBEB">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom">&nbsp;</td>
      <td width="62%" valign="bottom">Net cash received</td>
      <td width="10%" valign="bottom" align="right">$898.1</td>
      <td width="20%" valign="bottom" align="right">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;</td>
      <td width="62%" valign="bottom" bgcolor="#EBEBEB"></td>
      <td width="10%" valign="bottom" align="right" bgcolor="#EBEBEB">
        <hr noshade size="5" color="#000000">
      </td>
      <td width="20%" valign="bottom" align="right" bgcolor="#EBEBEB">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="top">(2)</td>
      <td width="96%" valign="top" colspan="4">To remove the
        assets and liabilities of Barneys at July 7, 2007.</td>
    </tr>
    <tr>
      <td width="4%" valign="top" bgcolor="#EBEBEB">(3)</td>
      <td width="96%" valign="top" colspan="4" bgcolor="#EBEBEB">To record the estimated income
        tax liability that resulted from the sale of Barneys.</td>
    </tr>
    <tr>
      <td width="4%" valign="top">(4)</td>
      <td width="96%" valign="top" colspan="4">To reverse valuation allowance
        recorded against the deferred tax benefit related to $303.0 of capital loss carryforwards
        previously determined to have expired unused.</td>
    </tr>
    <tr>
      <td width="4%" valign="top" bgcolor="#EBEBEB">(5)</td>
      <td width="96%" valign="top" colspan="4" bgcolor="#EBEBEB">To record the utilization
        of $303.0 of capital loss carryforwards to offset the capital gain
        related to the sale of Barneys.</td>
    </tr>
    <tr>
      <td width="4%" valign="top">(6)</td>
      <td width="96%" valign="top" colspan="4">To reverse amortization of
        forfeited restricted stock held by Barneys employees.</td>
    </tr>
    <tr>
      <td width="4%" valign="top" bgcolor="#EBEBEB">(7)</td>
      <td width="96%" valign="top" colspan="4" bgcolor="#EBEBEB">To record the
        estimated gain on the sale of Barneys, as follows:</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom">&nbsp;</td>
      <td width="62%" valign="bottom">Net cash received</td>
      <td width="10%" valign="bottom" align="right">$898.1&nbsp;</td>
      <td width="20%" valign="bottom" align="right">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;</td>
      <td width="62%" valign="bottom" bgcolor="#EBEBEB">Net assets sold</td>
      <td width="10%" valign="bottom" align="right" bgcolor="#EBEBEB">(451.4)</td>
      <td width="20%" valign="bottom" align="right" bgcolor="#EBEBEB">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom">&nbsp;</td>
      <td width="62%" valign="bottom">Reversal of amortization
        recorded as of July 7, 2007 relating to
        forfeited restricted stock held by Barneys employees</td>
      <td width="10%" valign="bottom" align="right">9.8&nbsp;</td>
      <td width="20%" valign="bottom" align="right">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;</td>
      <td width="62%" valign="bottom" bgcolor="#EBEBEB">Other comprehensive
        income related to Barneys</td>
      <td width="10%" valign="bottom" align="right" bgcolor="#EBEBEB">0.8&nbsp;</td>
      <td width="20%" valign="bottom" align="right" bgcolor="#EBEBEB">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom">&nbsp;</td>
      <td width="62%" valign="bottom"></td>
      <td width="10%" valign="bottom" align="right">
        <hr noshade size="1" color="#000000">
      </td>
      <td width="20%" valign="bottom" align="right">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;</td>
      <td width="62%" valign="bottom" bgcolor="#EBEBEB">Gain before income taxes</td>
      <td width="10%" valign="bottom" align="right" bgcolor="#EBEBEB">457.3&nbsp;</td>
      <td width="20%" valign="bottom" align="right" bgcolor="#EBEBEB">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom">&nbsp;</td>
      <td width="62%" valign="bottom">Income taxes*</td>
      <td width="10%" valign="bottom" align="right">(162.8)</td>
      <td width="20%" valign="bottom" align="right">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;</td>
      <td width="62%" valign="bottom" bgcolor="#EBEBEB">&nbsp;</td>
      <td width="10%" valign="bottom" align="right" bgcolor="#EBEBEB">
        <hr noshade size="1" color="#000000">
      </td>
      <td width="20%" valign="bottom" align="right" bgcolor="#EBEBEB">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom">&nbsp;</td>
      <td width="62%" valign="bottom">Net gain</td>
      <td width="10%" valign="bottom" align="right">$294.5&nbsp;</td>
      <td width="20%" valign="bottom" align="right">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;&nbsp;</td>
      <td width="4%" valign="bottom" bgcolor="#EBEBEB">&nbsp;</td>
      <td width="62%" valign="bottom" bgcolor="#EBEBEB">&nbsp;</td>
      <td width="10%" valign="bottom" align="right" bgcolor="#EBEBEB">
        <hr noshade size="5" color="#000000">
      </td>
      <td width="20%" valign="bottom" align="right" bgcolor="#EBEBEB">&nbsp;</td>
    </tr>
    <tr>
      <td width="4%" valign="top">&nbsp;</td>
      <td width="96%" valign="top" colspan="4">* Approximately $107.9 of these
        income taxes will not be paid, as the capital gain from this sale was
        largely offset by existing capital loss carryforwards.&nbsp; This $107.9
        benefit will be reported as a reduction of the income tax provision for
        continuing operations.</td>
    </tr>
    <tr>
      <td width="4%" valign="top" bgcolor="#EBEBEB">(8)</td>
      <td width="96%" valign="top" colspan="4" bgcolor="#EBEBEB">To remove
        accumulated other comprehensive income relating to Barneys.</td>
    </tr>
  </table>
</div>
<p align="center">- 7 -</p>
<hr noshade size="1" color="#000000">
<P><i>(d)&nbsp; Exhibits.</i></P>
<TABLE border=0 cellPadding=0 width="100%" id="table5" cellspacing="5">

  <TR>
    <TD vAlign=top width="11%"><u>Exhibit No.</u></TD>
    <TD vAlign=top width="89%"><u>Description</u></TD></TR>

  </TABLE>
<TABLE border=0 cellPadding=0 width="100%" id="table6" cellspacing="5">

  <tr>
    <TD vAlign=top width="11%">10.1</TD>
    <TD vAlign=top width="89%"> Master Confirmation dated September 6, 2007
      between Jones Apparel Group, Inc. and Goldman, Sachs &amp; Co. </TD>
  </tr>
  <tr>
    <TD vAlign=top width="11%">10.2*</TD>
    <TD vAlign=top width="89%"> Supplemental Confirmation dated September 6,
      2007 between Jones Apparel Group, Inc. and Goldman, Sachs &amp; Co. </TD>
  </tr>

  <tr>
    <TD vAlign=top width="11%">99.1</TD>
    <TD vAlign=top width="89%">Press Release of the Registrant dated September
      7,
      2007. </TD>
  </tr>
</TABLE>
<p align="left">* Portions of exhibit deleted pursuant to request for
confidential treatment.</p>
<p>&nbsp;</p>
<P align=center>- 8 -</P>
<HR noshade size="1" color="#000000">
<P align=center>&nbsp;<B>SIGNATURES</B></P>
<P>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 hereunto duly authorized.</P>
<P align=justify>&nbsp;</P>
<DIV align=center>
<CENTER>
<TABLE border=0 cellPadding=0
style="BORDER-BOTTOM: medium none; BORDER-LEFT: medium none; BORDER-RIGHT: medium none; BORDER-TOP: medium none"
width="100%">

  <TR>
    <TD width="50%"></TD>
    <TD width="50%">JONES APPAREL GROUP, INC.<BR>(Registrant)
      <P>By:&nbsp;<U>/s/ John T. McClain&nbsp;</U><BR>&nbsp;&nbsp;&nbsp;&nbsp;
      John T. McClain<BR>&nbsp;&nbsp;&nbsp;&nbsp; Chief Financial Officer</P></TD></TR></TABLE></CENTER></DIV>
<P>Date: September 10, 2007</P>
<P align=center>&nbsp;- 9 -</P>
<hr noshade size="1" color="#000000">
<P>Exhibit Index.</P>
<TABLE border=0 cellPadding=0 width="100%" id="table3" cellspacing="5">

  <TR>
    <TD vAlign=top width="11%"><u>Exhibit No.</u></TD>
    <TD vAlign=top width="89%"><u>Description</u></TD></TR>

  </TABLE>
<TABLE border=0 cellPadding=0 width="100%" id="table4" cellspacing="5">

  <tr>
    <TD vAlign=top width="11%">10.1</TD>
    <TD vAlign=top width="89%"> Master Confirmation dated September 6, 2007
      between Jones Apparel Group, Inc. and Goldman, Sachs &amp; Co. </TD>
  </tr>
  <tr>
    <TD vAlign=top width="11%">10.2*</TD>
    <TD vAlign=top width="89%"> Supplemental Confirmation dated September 6,
      2007 between Jones Apparel Group, Inc. and Goldman, Sachs &amp; Co. </TD>
  </tr>

  <tr>
    <TD vAlign=top width="11%">99.1</TD>
    <TD vAlign=top width="89%">Press Release of the Registrant dated September
      7,
      2007. </TD>
  </tr>
</TABLE>
<p align="left">* Portions of exhibit deleted pursuant to request for
confidential treatment.</p>
<p align="center">- 10 -</p>
</BODY>
</html>
[{"type": "8-K", "sequence": "1", "filename": "sep0607_8k.htm", "description": "FORM 8-K", "secsgml_size_bytes": 97446}]
{"company-data": {"conformed-name": "JONES APPAREL GROUP INC", "cik": "0000874016", "assigned-sic": "2330", "irs-number": "060935166", "state-of-incorporation": "PA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-10746", "film-number": "071109532"}, "business-address": {"street1": "250 RITTENHOUSE CIRCLE", "street2": "KEYSTONE PK", "city": "BRISTOL", "state": "PA", "zip": "19007", "phone": "2157854000"}, "mail-address": {"street1": "250 RITTENHOUSE CIRCLE", "city": "BRISTOL", "state": "PA", "zip": "19007"}}
Form 8-K
Exhibit 99.1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
September
6, 2007
JONES APPAREL GROUP, INC.
(Exact
name of
registrant as specified in its charter)
Pennsylvania
(State or Other Jurisdiction of
      Incorporation)
1-10746
(Commission File Number)
06-0935166
(IRS Employer Identification
  No.)
1411 Broadway
New York, New York  10018
(Address of principal executive offices)
(212) 642-3860
(Registrant's telephone number, including
area code)
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[   ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On September 6, 2007, Jones Apparel Group, Inc. ("Jones") entered
into an accelerated share repurchase ("ASR") agreement with Goldman,
Sachs & Co. ("Goldman"). Under the ASR agreement, Jones will
repurchase $400 million of its outstanding common stock, with approximately 15.5
million shares to be received on September 12, 2007 and the remaining shares to
be received at the end of an initial valuation period and upon final settlement
of the ASR program. Final settlement of the ASR program is scheduled for no
later than July 19, 2008, and may occur earlier at the option of Goldman or
later under certain circumstances. The initial shares repurchased by Jones are
subject to adjustment if Jones were to enter into or announce certain types of
transactions. During the term of the ASR program and for approximately two weeks
after final settlement, Jones may only make repurchases of its common stock with
the consent of Goldman.
The foregoing summary of the ASR agreement does not purport to be complete
and is qualified in its entirety by reference to the definitive Master
Confirmation and Supplemental Confirmation, which are filed as Exhibits 10.1 and
10.2 hereto and are incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On September 6, 2007, Jones completed
the sale of its indirect wholly-owned subsidiary, Barneys New York, Inc.
("Barneys"), to an affiliate of Istithmar PJSC, a Dubai based private
equity and alternative investment house ("Istithmar"). At the closing of the sale, Jones
received $947.5 million in cash, including $5.2 million related to estimated
working capital and capital expenditure adjustments, which is subject to certain
post-closing adjustments. Jones expects to realize estimated after-tax
proceeds, net of selling costs and transaction expenses, of $843.2 million. Jones paid an
aggregate of $49.4 million in cash for bonuses for key Barneys employees,
compensation for restricted stock held by certain employees of Barneys that was
forfeited upon the completion of the sale and other fees and costs related to the sale.
A copy of the press release announcing the completion of the Barneys sale and
the entry into the ASR agreement is attached as Exhibit 99.1 to this report.
Item 9.01  Financial Statements and Exhibits.
(b) Pro forma financial information.
Unaudited Pro Forma Condensed Consolidated Financial Statements
On September 6, 2007, Jones completed the sale of Barneys to Istithmar for
$947.5 million in cash, including $5.2 million related to estimated
working capital and capital expenditure adjustments, which is subject to certain
post-closing adjustments.
The following unaudited pro forma consolidated balance sheet at July 7, 2007
and the unaudited pro forma consolidated statements of operations for the years
ended December 31, 2004, 2005 and 2006, and the accompanying notes thereto, have
been prepared to illustrate the effects of the sale, as discontinued operations,
on the historical financial position and results of operations of Jones. The
unaudited pro forma consolidated financial statements and related notes do not
give any effect to any utilization of cash proceeds from the sale.  Since
the pending sale of Barneys met the criteria for discontinued operations as of
July 7, 2007, the statements of operations for the fiscal six months ended July
7, 2007 and July 1, 2006 included in Jones' Form 10-Q filed on August 14, 2007
reflected Barneys as discontinued operations.  Accordingly, Jones has not
presented the July 7, 2007 and July 1, 2006 interim statements of operations
herein.
The unaudited pro forma consolidated balance sheet as of July 7, 2007 assumes
the sale of Barneys occurred as of that date.  The unaudited pro forma
consolidated statements of operations for the years ended December 31, 2004,
2005 and 2006 assume the sale had occurred at the close of business on December 31, 2003.  The
assumptions and adjustments are described in the accompanying notes to the
unaudited pro forma consolidated financial statements.  The unaudited pro
forma consolidated financial statements should be read together with the
consolidated financial statements of Jones as of and for the periods ended July
7, 2007 and December 31, 2006 included in the quarterly and annual reports on
Forms 10-Q and 10-K/A (Amendment No. 2) for those respective periods. 
These pro forma statements do not necessarily reflect the results of operations
or financial position of Jones that would have resulted had the transaction
actually been consummated as of such dates and are not necessarily indicative of
the future results of operations or the future financial position of Jones.
- 2 -
Jones Apparel Group, Inc.
Unaudited Pro Forma Consolidated Statements of Operations
(All amounts in millions except per share data)
Year Ended December 31,
        2006
Historical
Discontinued
Operations
Pro Forma
Continuing
Operations
Net sales
$
        4,669.9
$(655.1)
$
        4,014.8
Licensing income (net)
51.8
(0.7)
51.1
Service
        and other revenue
21.1
-
21.1
Total
        revenues
4,742.8
(655.8)
4,087.0
Cost of goods sold
3,031.3
(357.1)
2,674.2
Gross profit
1,711.5
(298.7)
1,412.8
Selling,
        general and administrative expenses
1,341.7
(245.4)
1,096.3
Loss on sale of Polo Jeans
        Company business
45.1
-
45.1
Trademark
        impairments
50.2
-
50.2
Goodwill impairment
441.2
-
441.2
Operating loss
(166.7)
(53.3)
(220.0)
Interest
        income
3.5
-
3.5
Interest expense and
        financing costs
58.2
(7.7)
50.5
Gain on
        sale of stock in Rubicon Retail Limited
17.4
-
17.4
Equity in earnings of
        unconsolidated affiliates
4.5
-
4.5
Loss before provision for
        income taxes
(199.5)
(45.6)
(245.1)
Benefit
        for income taxes
(53.5)
(16.6)
(70.1)
Loss before cumulative effect of change in accounting principle
(146.0)
(29.0)
(175.0)
Cumulative effect of change
        in accounting for share-based payments, net of tax
1.9
-
1.9
Net loss
$(144.1)
$(29.0)
$(173.1)
(Loss) earnings
        per share
Basic
Loss before cumulative
        effect of change in accounting principle
$(1.32)
$(1.58)
Cumulative
        effect of change in accounting for share-based payments, net of tax
0.02
0.02
Basic
        loss per share
$(1.30)
$(1.56)
Diluted
Loss before cumulative
        effect of change in accounting principle
$(1.32)
$(1.58
)
Cumulative
        effect of change in accounting for share-based payments, net of tax
0.02
0.02
Diluted
        loss per share
$(1.30)
$(1.56
)
Weighted
        average common shares outstanding
Basic
110.6
110.6
Diluted
110.6
110.6
See accompanying notes to pro forma consolidated financial statements
- 3 -
Jones Apparel Group, Inc.
Unaudited Pro Forma Consolidated Statements of Operations
(All amounts in millions except per share data)
Year Ended December 31,
        2005
Historical
Discontinued
Operations
Pro Forma
Continuing
Operations
Net sales
$
        5,014.6
$(541.3)
$
        4,473.3
Licensing income (net)
59.6
(0.7)
58.9
Total revenues
5,074.2
(542.0)
4,532.2
Cost of
        goods sold
3,243.8
(293.4)
2,950.4
Gross
        profit
1,830.4
(248.6)
1,581.8
Selling, general and
        administrative expenses
1,333.2
(204.9)
1,128.3
Operating income
497.2
(43.7)
453.5
Interest
        income
1.1
-
1.1
Interest expense and
        financing costs
76.2
(5.2)
71.0
Equity in
        earnings of unconsolidated affiliates
3.2
-
3.2
I
ncome
        before provision for income taxes
425.3
(38.5)
386.8
Provision  for income
        taxes
151.0
(17.0)
134.0
Net income
$ 274.3
$(21.5)
$ 252.8
Earnings per
        share
Basic
$2.33
$2.15
Diluted
$2.30
$2.12
Weighted
        average common shares outstanding
Basic
118.0
118.0
Diluted
119.2
119.2
See accompanying notes to pro forma consolidated financial statements
- 4 -
Jones Apparel Group, Inc.
Unaudited Pro Forma Consolidated Statements of Operations
(All amounts in millions except per share data)
Year Ended December 31,
        2004
Historical
Discontinued
Operations
Pro Forma
Continuing
Operations
Net sales
$
        4,592.6
$(19.4)
$
        4,573.2
Licensing income (net)
57.1
-
57.1
Total revenues
4,649.7
(19.4)
4,630.3
Cost of
        goods sold
2,944.4
(10.5)
2,933.9
Gross
        profit
1,705.3
(8.9)
1,696.4
Selling, general and
        administrative expenses
1,176.7
(5.8)
1,170.9
Trademark
        impairments
0.2
-
0.2
Operating
        income
528.4
(3.1)
525.3
Interest income
1.9
-
1.9
Interest
        expense and financing costs
51.2
(0.1)
51.1
Equity in earnings of
        unconsolidated affiliates
3.8
-
3.8
I
ncome
        before provision for income taxes
482.9
(3.0)
479.9
Provision 
        for income taxes
181.1
(0.6)
180.5
Net
        income
$
        301.8
$(2.4)
$
        299.4
E
arnings
        per share
Basic
$2.44
$2.42
Diluted
$2.39
$2.37
Weighted
        average common shares outstanding
Basic
123.6
123.6
Diluted
126.5
126.5
See accompanying notes to pro forma consolidated financial statements
- 5 -
Jones Apparel Group, Inc.
Unaudited Pro Forma Consolidated Balance Sheets
(All amounts in millions except per share data)
At July 7,
          2007
Historical
Pro
          Forma
Adjustments
Pro Forma
ASSETS
CURRENT
          ASSETS:
Cash
          and cash equivalents
$ 
          53.6
$
          898.1
(1)
$ 
          951.7
Accounts receivable
374.5
374.5
Inventories
535.7
535.7
Assets held for sale
6
45.3
(611.3)
(2)
34.0
Deferred
          taxes
68.8
68.8
Prepaid expenses and other
        current assets
60.6
60.6
TOTAL CURRENT ASSETS
1,738.5
286.8
2,025.3
PROPERTY,
          PLANT AND EQUIPMENT, at cost, less accumulated depreciation and
          amortization of $418.9
283.3
283.3
GOODWILL
1,051.9
1,051.9
OTHER
          INTANGIBLES, at cost, less accumulated amortization
626.6
626.6
DEFERRED
          TAXES
14.5
107.9
(107.9)
(4)
(5)
14.5
OTHER
          ASSETS
52.9
52.9
$
          3,767.7
$
          286.8
$
          4,054.5
LIABILITIES
          AND STOCKHOLDERS' EQUITY
CURRENT
          LIABILITIES:
Short-term
          borrowings
$ 184.1
$ 184.1
Current portion of
          capital lease obligations
3.9
3.9
Accounts
          payable
219.1
219.1
Liabilities related to
          assets held for sale
165.9
(159.9)
(2)
6.0
Income
          taxes payable
5.9
54.9
(3)
60.8
Accrued employee
          compensation
39.4
39.4
Accrued
          expenses and other current liabilities
87.8
87.8
TOTAL
          CURRENT LIABILITIES
706.1
(105.0)
601.1
NONCURRENT
          LIABILITIES:
Long-term debt
749.3
749.3
Obligations
          under capital leases
29.7
29.7
Other
73.0
73.0
TOTAL
          NONCURRENT LIABILITIES
852.0
852.0
TOTAL
          LIABILITIES
1,558.1
(105.0)
1,453.1
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 154.3
1.5
1.5
Additional
          paid-in capital
1,344.3
(9.8)
(6)
1,334.5
Retained earnings
2,196.8
107.9
294.5
(4)
(7)
2,599.2
Accumulated
          other comprehensive loss
(2.6)
(0.8)
(8)
(3.4)
Treasury stock, 45.3
          shares, at cost
(1,330.4)
(1,330.4)
TOTAL STOCKHOLDERS'
          EQUITY
2,209.6
391.8
2,601.4
$ 3,767.7
$286.8
$
          4,054.5
See accompanying notes to pro forma consolidated financial
statements
- 6 -
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
As previously reported, on August 8, 2007, Jones entered into an amended and
restated definitive stock purchase agreement among Jones, its wholly owned
subsidiary Jones Apparel Group Holdings, Inc., its indirect wholly owned
subsidiary Barneys and affiliates of Istithmar PJSC, a Dubai-based private
equity and alternative investment house.  The Amended and Restated Stock Purchase
Agreement provides for Jones to sell Barneys to an affiliate of Istithmar PJSC for $942.3
million in cash, subject to certain purchase price adjustments.
On September 6, 2007, Jones completed the sale of Barneys to an affiliate of
Istithmar PJSC. 
At the closing of the sale, Jones received $947.5 million of cash, including
$5.2 million related to estimated working capital and capital expenditure
adjustments, which is subject to certain post-closing adjustments.  Jones
expects to realize estimated after-tax proceeds, net of selling costs and
transaction expenses, of $843.2 million.  Jones paid an aggregate of $49.4 million
in cash for bonuses for key Barneys employees, compensation for restricted stock
held by certain employees of Barneys that was forfeited upon the completion of
the sale and other fees and costs related to the sale.
PRO FORMA ADJUSTMENTS
The historical Consolidated Statements of Operations for 2004
through 2006 have been adjusted to report the
        operating results of Barneys as discontinued operations for the periods
presented in accordance with the provisions
of SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets."  Interest
        expense has been allocated
to discontinued operations based on the weighted-average monthly borrowing rate
under Jones' senior credit facilities applied to the average net monthly balance of
funds that have been advanced to Barneys.
The historical Consolidated Balance Sheet at July 7, 2007 has been
adjusted to give effect to pro forma events that are directly attributable to
the sale (including legal and investment banker fees) and are factually supportable. 
The balance sheet pro
forma adjustments are as follows (all amounts in millions).
(1)
To record the net cash received
        upon the sale of Barneys, as follows:
Gross cash proceeds, including $5.2
        related to estimated working capital and capital expenditure
        adjustments
$947.5
Investment banker, legal, accounting and
        other transaction costs
(16.7)
Cash payments to Barneys
        employees in lieu of restricted stock vesting, bonus payments and other
        employee costs
        associated with the sale
(32.7)
Net cash received
$898.1
(2)
To remove the
        assets and liabilities of Barneys at July 7, 2007.
(3)
To record the estimated income
        tax liability that resulted from the sale of Barneys.
(4)
To reverse valuation allowance
        recorded against the deferred tax benefit related to $303.0 of capital loss carryforwards
        previously determined to have expired unused.
(5)
To record the utilization
        of $303.0 of capital loss carryforwards to offset the capital gain
        related to the sale of Barneys.
(6)
To reverse amortization of
        forfeited restricted stock held by Barneys employees.
(7)
To record the
        estimated gain on the sale of Barneys, as follows:
Net cash received
$898.1
Net assets sold
(451.4)
Reversal of amortization
        recorded as of July 7, 2007 relating to
        forfeited restricted stock held by Barneys employees
9.8
Other comprehensive
        income related to Barneys
0.8
Gain before income taxes
457.3
Income taxes*
(162.8)
Net gain
$294.5
* Approximately $107.9 of these
        income taxes will not be paid, as the capital gain from this sale was
        largely offset by existing capital loss carryforwards.  This $107.9
        benefit will be reported as a reduction of the income tax provision for
        continuing operations.
(8)
To remove
        accumulated other comprehensive income relating to Barneys.
- 7 -
(d)  Exhibits.
Exhibit No.
Description
10.1
Master Confirmation dated September 6, 2007
      between Jones Apparel Group, Inc. and Goldman, Sachs & Co.
10.2*
Supplemental Confirmation dated September 6,
      2007 between Jones Apparel Group, Inc. and Goldman, Sachs & Co.
99.1
Press Release of the Registrant dated September
      7,
      2007.
* Portions of exhibit deleted pursuant to request for
confidential treatment.
- 8 -
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 hereunto duly authorized.
JONES APPAREL GROUP, INC.
(Registrant)
By:
/s/ John T. McClain
John T. McClain
Chief Financial Officer
Date: September 10, 2007
- 9 -
Exhibit Index.
Exhibit No.
Description
10.1
Master Confirmation dated September 6, 2007
      between Jones Apparel Group, Inc. and Goldman, Sachs & Co.
10.2*
Supplemental Confirmation dated September 6,
      2007 between Jones Apparel Group, Inc. and Goldman, Sachs & Co.
99.1
Press Release of the Registrant dated September
      7,
      2007.
* Portions of exhibit deleted pursuant to request for
confidential treatment.
- 10 -