Blog: Leonie BarrieAll change on the brand front

Leonie Barrie | 17 October 2011

Struggling apparel firm Liz Claiborne Inc last week revealed plans to shed more brands, including its namesake line, for $328m as part of ongoing attempts to reduce its long-term debt. It will also change its name as the business refocuses on its core Juicy Couture, Lucky Brand and Kate Spade brands.

The deals will see JC Penney Co buy the Liz Claiborne and Monet brands, while Bluestar Alliance will acquire the Kensie, Kensiegirl and Mac & Jac brands. The company also said it had completed the sale of the Dana Buchman label to Kohl's Corp. Other changes will see an early termination of the DKNY Jeans and DKNY Active license agreements with Donna Karan International, which will finish at the end of 2011 - one year ahead of schedule.

The company is confident it has finally reached a critical turning point - but with falling sales and a loss of $305.7m in its last financial year, it still has a long way to go.

Apparel and footwear company Jones Group Inc is also mulling the sale of its jeanswear division to Israeli apparel and lingerie maker Delta Galil Industries Ltd for up to $400m. The New York based company, whose jeanswear brands include Energie, l.e.i., and Gloria Vanderbilt, said it expects talks with Delta Galil to be completed within a month.

And specialty apparel retailer Gap Inc has revealed it intends to close one-fifth of its US stores and focus on international growth. Under the company's new global strategy it expects to see 30% of sales coming from international and online businesses by the end of fiscal 2013. The move acknowledges the saturated retail market built up in the years following the millennium is unsustainable.

Meanwhile, in India the luxury apparel market is starting to take off and major international brands are preparing to exploit the opportunities, a New Delhi conference was told last week. But while the government is considering lifting the limit on foreign direct investment in single brand retail, its suggestion that firms also make India a sourcing hub was not so enthusiastically received.

Indeed, separate reports suggest the US$62bn Indian textile industry is facing a severe financial crisis as 122 companies, including major players such as Vardhman, reported net losses for the April-June quarter of 2011.

And the US retail, apparel and textile industries are divided over the passage of legislation implementing no fewer than three FTAs - between the US and Panama, Colombia and South Korea. The arguments rage on as to whether this will give a much-needed boost to the ailing US economy - or simply kick it when it's down.


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