Jones Apparel Group has signed a deal to buy Stuart Weitzman Holdings, the company that produces the eponymous line of women's salon footwear and accessories named after its American designer, who is based in Spain.

Jones will initially pay about $180 million to shareholders for a 55 percent stake in the privately held company. It will pay the rest of the money at the end of 2012, based on the value of the company then. Irving Place Capital is one of those shareholders. Stuart Weitzman, the company's founder, will keep a 45 percent interest. Weitzman initially sold a 40 percent stake in 2005 to Bear Stearns Merchant Banking, which is now Irving Place Capital.

Stuart Weitzman had sales of about $193 million for the 12 months ended Jan. 2. It sells in about 60 countries, and has 38 retail stores in the U.S. and seven stores (including flagships in Rome and Milan) and 19 licensed stores outside the U.S. In the last five years alone it opened 20 full-price stores in the U.S., along with five outlet stores. Weitzman will maintain his role as executive chairman of his company, for which he has also been the chief creative force. Footwear News reports that the president of his company, Wayne Kulkin, will also remain in his position.

In an interview with Footwear News, Weitzman said that functions such as operations, warehousing and accounting might be folded in with Jones Apparel, and that he hoped that Jones' access to great real estate would help Stuart Weitzman to find new store locations. He is taking the acquisition as a chance to expand the luxury label, saying that the company plans to bring its e-commerce in-house. Expansion plans for the near future also include introducing sunglasses for spring 2011, and opening stores in Canada and Germany. Some analysts speculated that the deal would result in the development of Stuart Weitzman apparel, and possibly more accessories, including jewelry. Weitzman launch a line of handbags a few years ago.

Weitzman expects sales to increase by about 25 percent for the current fiscal year. He also said that even though Jones can buy the remaining interest in the company at the end of 2012, he doesn't plan to leave.

Footwear News reported that Jones was thinking of an offering of $250 million in debt to help pay for Weitzman at the end of April, but then put that on hold because of the unfavorable financial market.

Jones Apparel ended its first quarter with $278.8 million in liabilities, but inventories were cut down by 25 percent. The company had a tiny drop in revenues for the first quarter of 2010, falling by 0.4 percent to $887.3 million. The gross margin, however, managed to rise by 3.9 percentage points to 36.8 percent. Net income improved drastically to $39.4 million, compared with $300,000 in 2009.

Revenues in the footwear and accessories division grew by 2.3 percent to $242.4 million, delivering an operating margin of 10.0 percent compared with 6.7 percent last year. The adjusted margin was 10.1 percent, up from 8.4 percent for the first quarter 2009.

Retail revenues for the whole company were nearly flat at $141.9 million, compared with $141.2 million in 2009. The operating margin for this segment was 16.0 percent, though, a huge turnaround from the negative margin of 41.1 percent last year. Sales at Nine West and other stores opened for more than a year were up by 10.5 percent on a comparable basis.

Jones closed 63 retail stores in the quarter and ended up with 877 doors. It plans to close another 110 unprofitable locations by the end of 2010. It has also launched a e-commerce site for ShoeWoo, its multi-brand retail shoe concept.