• Q3 loss narrows to $62.7m from $90.5m

  • Sales fell 13.6% to $658m

  • Reaffirmed H2 operating targets

Apparel maker Liz Claiborne Inc has narrowed its third quarter losses after better gross margins at Kate Spade, Mexx and Partnered Brands combined with pared down expenses to offset lower sales.

The company also reaffirmed its second half operating targets, despite CEO William McComb expressing caution "about the consumer given overall economic conditions."

He added: "We remain confident that product and marketing initiatives currently in place will generate positive comparable store sales at Juicy, Lucky, Kate and Mexx in the fourth quarter. We also remain optimistic regarding continued strong performance of the Liz brand at JCPenney."

Liz Claiborne said it lost $62.7m or $0.67 per share, compared with a loss of $90.5m or $0.96 per share, a year earlier. Adjusted for the impact of foreign currency exchange rates, losses were $0.24 per share.

Net sales for the third quarter fell 13.6% to $658m, down from $761.7m in the same period last year. The biggest hit was an $83m drop in Liz Claiborne brand sales as the firm moved to licensing models under deals with JCPenney and QVC.

In its Domestic-Based Direct Brands segment, which includes Juicy Couture, Kate Spade and Lucky Brand, sales rose 7.4% to $291m.

The International-Based Direct Brands segment, which covers Mexx, sales were down 16.4% to $187m, largely due to declines in Mexx Europe. And for the wholesale-based Partnered Brands business, sales tumbled 32.4 to $180m.

Gross profit rose to 51.3% of sales, up from 45.3% a year ago, reflecting higher gross profit rates in all segments and an increased proportion of sales from the Domestic-Based Direct Brands segment.