Liz Claiborne Eyes More Losses in 2009, Bets on Isaac Mizrahi
Posted on March 5, 2009Liz Claiborne Inc. is forecasting bigger losses for the first half of 2009. The company says it is looking for ways to cut costs.
Sales in the quarter fell 22 percent to $911.2 million from $1.17 billion, hurt by steep losses in the partnered brands division as well as in Mexx, which the company broke into a third category — "international-based direct brands" — for the first time to separate the troubled Amsterdam-based retailer from the better performing direct brands Juicy Couture, Lucky Brand and Kate Spade.In addition to cutting costs, Claiborne is going to reevaluate pricing on its clothing lines and will launch an online store where customers can purchase the the Liz Claiborne New York line by Isaac Mizrahi will be available. In May you can buy the line at lizclaiborne.com. Claiborne has been happy with sales of Isaac's first line so far.
For fiscal year 2008, Claiborne saw a loss of $951.8 million, or $10.17 a diluted share, compared with a 2007 loss of $372.8 million, or $3.74. Annual revenues fell 10 percent to $3.98 billion from $4.44 billion. 2046438 Due to economic uncertainty, Claiborne is "dramatically reducing this reinvestment in 2009 as we plan to open approximately 12 stores versus the 139 stores in 2008," according to chief financial officer Andrew Warren. The company said it has cut 2,700 positions and realized $450 million in cost savings through restructuring and, for 2009, is further reducing capital expenditures to $60 million to $70 million to increase liquidity and pay down debt.
"I wouldn't say that there is a lot of fat left," said McComb. "But I would say that definitely there are additional cost places that we can and will go, and I am not even so sure that we're going to wait to trigger based on a softening environment." Juicy sales were $172 million, a 2 percent rise or, excluding fragrance licensing, 17 percent growth. Lucky sales were $138 million, a 21 percent increase, or 17 percent excluding fragrance. Kate Spade sales climbed 28 percent to $40 million.
Brights spots within the direct brands portfolio have included the new Juicy intimates line, the new Kate Spade jewelry line, Lucky accessories and the new Juicy flagship on Fifth Avenue in New York, according to the company.