Jones Apparel Group

(JNY)

said that after completing a review of its denim manufacturing operations in Mexico, the company will close its laundry, assembly and distribution operations located in San Luis.

All manufacturing will be consolidated into existing operations in Durango and Torreon, Mexico.

The company will incur about $14 million of pretax restructuring costs in the third quarter. Jones expects annual operational savings of $5 million.

About 3,500 employees will be affected by the closing. The company said it's undertaking a number of measures to assist the workers, including severance and benefits packages. In addition, Jones recorded a charge of $3.2 million in the second quarter as a result of an arbitration award to a former employee.

Shares of Jones, a designer and wholesaler of branded apparel, footwear and accessories, were up 20 cents to $31.95.