Fifth & Pacific continues to back Juicy Couture
Fifth & Pacific Companies has reiterated its commitment to its struggling Juicy Couture brand as the apparel firm outlined its goals and priorities for 2013.
"This has to be the year where Juicy finds stabilisation," chief executive officer Bill McComb told investors at the ICR XChange conference in Miami last week.
Fifth & Pacific has seen its largest brand, Juicy Couture, weigh on its fortunes for some time. Only last week, the company was forced to admit that disappointing Juicy Couture sales and Superstorm Sandy hit its fourth-quarter performance.
Over the quarter, Kate Spade and Lucky Brand saw sales increase 27% and 3% respectively, while Juicy Couture posted a 2% decline.
Hurricane Sandy and Sandy Hook continued to affect sentiment in what McComb described as a "somewhat joyless holiday" by the consumer.
"Juicy had gone from three years of being very safe with its product line, not innovating, not introducing newness and missing key runway trends to a different guardrail of taking what probably should have been the top 15-20% of the merchandising architecture and making it the whole architecture," McComb explained.
"Price points, as a result, were too high and the degree of fashion in the line, which would be appropriate for the top of the merchandising pyramid fluttered all the way through."
Paul Blum was appointed as Juicy Couture chief executive officer in December in the hope he would drive growth at the brand. He had previously worked at Kenneth Cole Productions and jewellery firm David Yurman.
"Paul is on track to execute year one and put in place year two strategic and operational realignments at the businesses," McComb said.
"The design direction is very good - it's established. We have merchandising strategies that we now have to implement and we are on path to do it."
The label, which has a presence in the Middle East and Asia, he continued, is as solid as ever overseas. "Juicy is in full turnaround mode. The brand identity is actually as strong as Kate Spade's - even stronger overseas and the shifts in positioning merchandising that did not deliver are being addressed now."
As well as 2013 being the year when Juicy stabilises itself, it's also the year where the three brands will focus more on digital and omni-channel integration, McComb insisted.
"Despite a prolonged turnaround at Juicy Couture, the strength of Kate Spade and Lucky brand is evident even in the forward looking guidance that we provided for 2013," he added.
Fifth & Pacific expects adjusted EBITDA to be in the range of US$63-68m, resulting in a full-year expectation of $100-105m, "which is at the low end of the range we guided previously".
"We are as committed as a management team and board to unlocking value as we are to actually building value. What we're not going to do are short-term things that on one hand increase value and on the other hand destroy value," McComb added.
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