Claiborne shakes up branding strategy
By Jonathan Birchall in New York
Published: October 9 2009 03:00
Liz Claiborne, the branded clothing company, is pulling its namesake brands out of Macy’s, Dillard’s and other department stores in a new strategy shaped by changes in the retail landscape that have intensified during the recession.
The company said its main Liz Claiborne brands, one of the best known women’s clothing names in the US, would from next autumn be sold exclusively at JC Penney’s mid-price department stores, while the Liz Claiborne, New York brand designed by Isaac Mizrahi would be sold by QVC, the television shopping channel.
The company said that as a result of the move, it expected its wholesale business, which sells its brands to other retailers, to report an adjusted profit next year.
The news led to a rise of over 25 per cent in its shares, which have been hit by long-term liquidity concerns.
Liz Claiborne will continue to be responsible for design of the brands sold at JC Penney. But the clothing will be be produced by JC Penney’s suppliers.
The move reflects a shift in power between retailers and brands that has been a feature of the US retail industry for the past decade.
Stores such as JC Penney and Kohl’s have sought exclusive brands that
differentiate them from discount rivals such as Walmart and Target.
Independent brands not owned by retailers have found themselves under pressure for retail space as stores cut back on inventory levels.
Bill McComb, chief executive, acknowledged that the idea of moving such a well-known brand to one retailer might have been unthinkable 15 or 20 years ago.
“The last year has proven that many axioms and proverbs written 20 years ago have been shattered,” he said.
Liz Claiborne started selling two sub-brands at Penney’s in 2007, angering Macy’s, an important outlet for Liz Claiborne and Claiborne brands.
Mr McComb said the company would receive a percentage of net sales and a share of gross profits for the brands at JC Penney.
Liz Claiborne’s wholesale brand sales were worth just over $1.5bn in its 2008 fiscal year, compared with total revenues of $3.9bn.
Its wholesale brands lost $118m in the same year