The company also said it agreed to pay increased fees and interest rates.

Jones said a $750 million facility maturing in May 2010 was reduced to $600 million and its terms changed to offer Jones "greater flexibility in the operation of its businesses during these unprecedented economic times."

A second facility for $500 million, maturing in June 2009, was terminated, said Jones, whose brands include Jones new York, Nine West and Anne Klein.

Jones in October cautioned that sales trends were in steep decline, forecast a weak holiday shopping season for the retail industry and said it was reining in spending in 2009.

The credit facilities are primarily used as backing for trade letters of credit and other supply chain purposes, but also may be used for working capital and general corporate purposes, the company said. Currently, no cash borrowings are outstanding under the existing facilities.

"We are pleased with the overwhelming support of the financial institutions associated with the amendment process and believe it was prudent to pursue amendments now that allow financial flexibility in the current uncertain economic environment," Jones Chief Financial Officer John McClain said in a statement.

"Our businesses have generated and maintained a significant amount of cash on hand, and we believe that, combined with the $600 million of committed bank credit, provides us with the financial flexibility we need," he added.

Fees and interest rates under the facility increased to current market rates, and Jones said it will grant certain security for borrowings under the facility. In addition, Jones said it will pay customary execution fees.

J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. led the amendment process, said Jones, which added that almost all banks and financial institutions participated in the amendment process.

Shares of Jones rose to $4.50 in pre-market trading from their Wednesday closing price of $3.89.

(Reporting by Ben Klayman; Editing by Steve Orlofsky)