Targeting Younger Buyers, Liz Claiborne Hits Snag (1)

Targeting Younger Buyers, Liz Claiborne Hits Snag (1) -...

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Unformatted text preview: BUSINESS AUGUST 15, 2010 Targeting Younger Buyers, Liz Claiborne Hits Snag By RACHEL DODES This month, J.C. Penney Co. is launching a new Liz Claiborne clothing, home and accessories line in all 1,100 of its stores, its biggest brand launch ever. View Full Image The Associated Press Isaac Mizrahi raises the gavel with William McComb, right, during closing bell ceremonies at the New York Stock Exchange April 28, 2009. But while the exclusive collection is considered a coup for Penney, it could mark the final chapter in the story of the 34-year-old Liz Claiborne brand. Liz Claiborne, once the No. 1 vendor at American department stores, has effectively ceded control of its iconic brand to Penney as part of the deal. The agreement—which calls for Claiborne to give up production and marketing and convert the label into a mass market line in exchange for royalties—was struck only after Macy's Inc. slashed its Claiborne orders last year. The deal gives Penney the option to buy U.S. rights to Liz Claiborne's name in five years. "For Penney, this is wonderful," says Candace Corlett, president of New York retail consultancy WSL Strategic Retail. "It's Liz I wonder about." The company that pioneered career apparel for a generation of working women, Liz Claiborne Inc. has seen its fortunes decline precipitously in the past few years. Since Chief Executive William L. McComb took over in 2006, the company has posted 11 consecutive quarters of red ink. Liz has seen its credit ratings fall from investment grade to junk and the S&P 500 removed the stock from its index. Its stock closed at $4.82 on Friday, compared with $43 when Mr. McComb joined the company. The Rise and Fall of Liz Claiborne Inc. View Interactive Here's a look back at the storied brand. More photos and interactive graphics Related Video Isaac Mizrahi on Dressing the Real Woman (03/30/09) Markets Hub: Cautious Signals From Retailers (08/13/10) Retailers Face Back-to-School Season (08/02/10) The recession took a toll on all clothing makers, and even before Mr. McComb took over Liz Claiborne the company faced an aging consumer base and a flagship brand in decline for years. Profits and revenue were slowing, and Mr. McComb inherited a bruised relationship with an important client, Macy's department store. Mr. McComb's strategy, to move the company away from its core baby-boomer roots, hasn't solved those problems so far, and it has stirred up a few new ones. The company's woes show how tough it can be to rejuvenate an iconic brand. Founded in 1976, Liz Claiborne grew explosively by providing stylish career apparel to the droves of women who entered the workforce in the 1980s. Many of those women, born between 1946 and 1964, now are starting to retire and not spending as much money on clothes as younger women do....
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This note was uploaded on 02/01/2011 for the course MARKETING 301 taught by Professor Hopner during the Spring '11 term at George Mason.

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Targeting Younger Buyers, Liz Claiborne Hits Snag (1) -...

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