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Liz Claiborne generates decrease in inventory of 17%
18 May '09
5 min read
Mr. McComb added, "We successfully closed our sourcing agreement with Li & Fung on March 31st. Our brand teams are currently hard at work, partnering with Li & Fung to drive the operational excellence that we expect to achieve in our sourcing operation. We are pleased with the progress made in the first six weeks of this relationship and continue to expect Li & Fung to play a critical role in collaborating with us to drive meaningful gross margin improvement across our brands, beginning in the Holiday 2009 season.
We are very pleased with market and consumer acceptance of our recently launched Liz Claiborne New York brand and remain optimistic that we will see meaningful operating and financial gains in this business. We also recently announced the hiring of Thomas Grote, formerly of Esprit, as the new CEO for Mexx. Thomas has an impressive background and proven track record of success and we expect that he will accelerate the execution of Mexx's turnaround."
Mr. McComb concluded, "Our outlook for the balance of the year remains unchanged. We expect comp store sales declines in the 15-25% range in our Juicy Couture, Lucky Brand and Kate Spade brands and a high single digit comp store sales decline in our Mexx brand through the third quarter of 2009, with fourth quarter comps flattening as we anniversary the sharp downturn that began in September 2008.
We are projecting an adjusted operating loss for the second quarter -- and although we expect the GAAP loss to be smaller than first quarter, driven by declining restructuring costs, the second quarter sales and adjusted operating loss profile will be similar to what we reported today for the first quarter. By the third quarter, we expect results to improve, primarily driven by the impact of the $70 million in cost reductions announced in February and the positive impact on margin resulting from reduced inventories.
We are also projecting an adjusted operating profit for the fourth quarter. This sales and earnings scenario continues to characterize our thinking. In spite of a more generally optimistic tone in the news and in some industry reports, we see the environment as still fundamentally promotional, with a reserved consumer and significantly reduced traffic."
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We are very pleased with market and consumer acceptance of our recently launched Liz Claiborne New York brand and remain optimistic that we will see meaningful operating and financial gains in this business. We also recently announced the hiring of Thomas Grote, formerly of Esprit, as the new CEO for Mexx. Thomas has an impressive background and proven track record of success and we expect that he will accelerate the execution of Mexx's turnaround."
Mr. McComb concluded, "Our outlook for the balance of the year remains unchanged. We expect comp store sales declines in the 15-25% range in our Juicy Couture, Lucky Brand and Kate Spade brands and a high single digit comp store sales decline in our Mexx brand through the third quarter of 2009, with fourth quarter comps flattening as we anniversary the sharp downturn that began in September 2008.
We are projecting an adjusted operating loss for the second quarter -- and although we expect the GAAP loss to be smaller than first quarter, driven by declining restructuring costs, the second quarter sales and adjusted operating loss profile will be similar to what we reported today for the first quarter. By the third quarter, we expect results to improve, primarily driven by the impact of the $70 million in cost reductions announced in February and the positive impact on margin resulting from reduced inventories.
We are also projecting an adjusted operating profit for the fourth quarter. This sales and earnings scenario continues to characterize our thinking. In spite of a more generally optimistic tone in the news and in some industry reports, we see the environment as still fundamentally promotional, with a reserved consumer and significantly reduced traffic."
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Liz Claiborne Inc
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