Blog: Liz offloads first lines
Leonie Barrie | 14 September 2007
The sale of four moderately priced brands by Liz Claiborne to the US arm of Li & Fung is seen as good news since these were thought likely to be the most difficult labels to offload. The apparel firm’s decision to discontinue three other brands is also another important step in its efforts to focus on fewer, but more powerful names.
Now that the four brands (Emma James, Intuition, JH Collectibles and Tapemeasure) have gone, the First Issue business at Sears is to be discontinued, and the Stamp 10 and Tint lines incorporated into ranges sold at Kohl’s and JC Penney respectively, the company can focus on getting rid of the higher priced brands that have not yet been sold or discontinued.
These include C&C California, Dana Buchman, Ellen Tracy, Enyce, JH Collectibles, Laundry by Design, Mac & Jac, prAna and Sigrid Olsen – none of which is likely to remain part of the Liz Claiborne portfolio for long if reports of high levels of interest are to be believed.
But once these brands have gone, the company’s focus will need to switch to growth. Posting a 64% slump in second quarter profit in July to $14m, it warned of continuing pressures in the wholesale channel – which are weighing heavily on sales.
Ratings agency Standard & Poor last week said it believes Liz Claiborne will be challenged to improve its profitability in light of a difficult retail environment characterised by retailer consolidation, weak customer traffic, and the proliferation of retailers' private-label goods.
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