Clothing and apparel company Liz Claiborne said first-quarter earnings grew 4 per cent after the company made better-than-predicted sales on its diversification strategy.

First-quarter earnings totalled 71.4 million compared to $68.8m in the same period last year, while sales increased 10 per cent to $1.21 billion from $1.1bn a year ago.

Same-store sales rose 3.6 per cent, encouraged by a 15 per cent hike in the specialty retail sector.

Sales at the newly acquired C&C California business totalled $17m from foreign currency exchange rates.

Paul Charron, chairman and chief executive officer, said: " Macroeconomic factors such as high oil prices, rising interest rates, growing concerns about inflation and a slowing economy, as well as distractions caused by the current uncertainty resulting from the merger and acquisition headlines in the retail sector, have impacted retail sales in domestic channels of distribution."

He added: "Despite this difficult backdrop and an especially strong year-ago period for many of our business units, the disciplined execution of our multi-brand, multi-channel, multi-geography diversification strategy enabled us to achieve higher than planned sales."

Charron reaffirmed the company's previous guidance of a sales increase of 6 - 8 per cent for 2005.

Liz Claiborne Inc designs and markets an extensive range of women's and men's fashion apparel and accessories under brands such as Axcess, Bora Bora, C & C California, Claiborne, Ellen Tracy, Emma James, JH Collectibles, Juicy Couture, Laundry by Shelli Segal, LIZ, Liz Claiborne, Mambo, Marvella, Mexx, Monet,  Trifari and Villager.

In addition, Liz Claiborne Inc. holds the exclusive, long-term license to produce and sell men's and women's collections of DKNY Jeans and DKNY Active, as well as CITY DKNY.