US women's wear group Liz Claiborne has extended its bank credit facility after reducing year-end debt ahead of expectations, but says fourth quarter earnings are likely to be lower than forecast.

It is blaming slimmer margins in its retail and wholesale businesses for the drop in earnings from continuing operations, which are now seen in the range of $0.00 to a loss of $0.15 per share, down from earlier guidance of $0.19 to $0.24 per share.

The new credit facility, provided by JP Morgan Securities and Banc of America Securities, has been reduced to US$600m from $750m and is extended to 31 May 2011.

William McComb, chief executive officer of Liz Claiborne, said: "While we continue to aggressively manage our balance sheet and preserve liquidity, this amendment and extension affords us stability in the face of a most uncertain 2009."

In the fourth quarter, he said, the company paid down $175m in bank debt, ending the year with a total debt of $745m.

In a trading update, McComb went onto say that the operating environment in the fourth quarter was the most challenging it has experienced "in decades".

He said that despite a pickup in same-store sales in the last few weeks of the quarter, comps for Juicy Couture, Lucky Brand and Kate Spade brands were each in the negative mid-teens, while Mexx's comps were negative 12%.