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Liz Claiborne plans to close 87 outlet stores
21
Jul '10
Liz Claiborne Inc. announced plans to exit its Liz Claiborne branded outlet stores in the United States and Puerto Rico. As a result of this decision, the Company expects the meaningful operating losses related to this business to be eliminated in early 2011 when this action is anticipated to be completed. The Company's other outlet stores in the United States and Puerto Rico for its Juicy Couture, Lucky Brand, Kate Spade and Kensie brands are not impacted by this decision.

William L. McComb, Chief Executive Officer of Liz Claiborne Inc., said: "With the launches of the Liz Claiborne brand at JCPenney and Liz Claiborne New York at QVC both next month we're announcing that we will be exiting our 87 Liz Claiborne branded outlet stores in the United States and Puerto Rico, the majority of which will be exited in the coming months."

Mr. McComb continued, "A number of factors precipitated this decision. Our current fleet of Liz Claiborne branded outlet stores was originally designed and leased to handle clearance for many brands in our portfolio an outdated consumer proposition and one that no longer makes economic sense, given the vast changes we have made to our portfolio and business strategy over the past three years."

Mr. McComb concluded, "In addition, our corporate strategy allocates the majority of our capital dollars to our retail-based Direct Brands, while leveraging a stable of Partnered Brands for additional revenue generation and to help support our growth opportunities across the Company. Considering the capital efficient, licensing-oriented model for the Liz Claiborne brand, our organizational energy and resources are better used to support successful and profitable businesses at JCPenney and QVC."

In connection with this action, the Company currently estimates that it will incur non-cash impairment charges of approximately $7.0 million in the second quarter of 2010 and may incur additional non-cash charges in future periods. The Company also expects to record cash charges related to lease terminations and severance and is in the process of determining these cash charges. The Company will provide more comments on this process during its second quarter earnings conference call, which is scheduled for August 5th at 10am.

Liz Claiborne Inc. designs and markets a global portfolio of retail-based premium brands including Juicy Couture, Kate Spade, Lucky Brand and Mexx. The Company also has a refined group of department store-based brands with strong consumer franchises including the Monet family of brands, Kensie, Kensiegirl, Mac & Jac, and the licensed DKNY Jeans and DKNY Active brands.

The Dana Buchman and Axcess brands are sold at Kohl's, and beginning in Fall 2010, the Liz Claiborne and Claiborne brands will be available at JCPenney and the Liz Claiborne New York brand designed by Isaac Mizrahi will be available at QVC and internationally.

Liz Claiborne Inc

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