Apparel company Liz Claiborne Inc is to sell four brands to the US unit of global sourcing group Li & Fung Limited, as it attempts to shift its focus to smaller, more powerful labels and develop its own retail businesses.

Li & Fung USA will buy the trademarks and inventory of the Emma James, Intuitions, JH Collectibles and Tapemeasure brands, which Liz Claiborne marked in July for "strategic review" and a possible sale.

The transaction, for an undisclosed sum, was first reported by just-style yesterday and is expected to close in the fourth quarter of 2007. The two companies says they are working together to ensure a smooth transition for retail partners, vendors and employees.

Liz Claiborne also said it plans to discontinue its First Issue business at Sears by the end of 2007, and incorporate two denim-based lines into other ranges.

The move, which is expected to enhance its businesses at Kohl's and JC Penney, will see the Stamp 10 brand become part of the Axcess label, which is exclusive to Kohl's, while the Tint product will be incorporated into the Liz & Co line sold at JC Penney. As such, Stamp 10 and Tint will no longer exist as distinct labels.

William L McComb, Liz Claiborne's chief executive officer, said the changes announced late yesterday (13 August) are just "the first phase of the strategic review process."

He added: "Throughout the remainder of the process, we will continue to operate in the best interest of the brands under strategic review and will take whatever actions necessary to grow and develop each business.

At the conclusion of the process, Liz Claiborne Inc will be a more agile and focused company."

Included in the 16 of its 36 apparel brands also up for review, but which have not yet been sold or discontinued, are C&C California, Dana Buchman, Ellen Tracy, Enyce, JH Collectibles, Laundry by Design, Mac & Jac, prAna and Sigrid Olsen.

Liz Claiborne took the decision to realign its business after fallen victim to increasing consolidation amongst its department store customers who are now increasingly focusing on private labels. Results for the second quarter, posted in July, showed a 13% drop in profit to US$14m.

Its new direction reverses a decade-long strategy of acquiring as many brands as possible guard against fashion cycles.

In June, the company split its business into two segments - a retail-based Direct Brands division which includes the Juicy Couture, Kate Spade, Lucky Brand Jeans and Mexx brands, and a smaller wholesale-based Partnered Brands division.

Li & Fung, which sources products for US retailers such as Abercrombie & Fitch and Kohl's, was always seen as a likely taker for some of the brands on the block after setting ambitious growth targets through acquisitions to help it take advantage of the global trend toward outsourcing.

Last month it announced plans to spend more than $243m on buying UK-based shoe supplier Peter Black International, and private label supplier Regatta USA.

Rick Darling, president of Li & Fung USA, said the new lines bought from Liz Claiborne will be used to "expand our proprietary brand portfolio."

"We now look forward to reinvigorating and growing the brands at retail," he added.

Li & Fung's plans are thought to include repositioning the brands as proprietary labels
for specific retailers.