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In announcing a 39.7 percent increase in fourth-quarter earnings Thursday, Liz Claiborne Inc. said it will shutter all 22 remaining freestanding Liz Claiborne stores in the U.S., while converting at least five of these units to other corporate nameplates. For instance, after an expensive recent renovation, the Liz Claiborne store on Fifth Avenue in Manhattan will become the first U.S. retail location for Mexx, the Netherlands-based label acquired in May 2001.
The apparel giant’s retail strategy includes the opening of its first Sigrid Olsen site by late summer 2003 in the Boston area. There were no announced changes to its retail outlet strategy.
Paul Charron, chairman and chief executive officer, said during a morning conference call that the firm was changing its specialty retail strategy as part of its ongoing effort to deploy resources and assets to concepts showing greater growth potential. He pointed out that while all 22 domestic Liz Claiborne stores will shutter, it is a move that the company began since 1999, when it closed 19 stores. Since then, the company has been closing stores when leases came due.
In a statement, Charron noted: "The Liz Claiborne consumer is well-served by a wide department store distribution [consisting of] 2,000 locations nationwide. To this end, Liz Claiborne brand specialty stores are essentially redundant."
The ceo said on the call that specialty retail has been an area of focus for the company, but that it has been "unable to find a specialty retail acquisition that meets our criteria." While the firm continues to explore possible opportunities, it decided to take brands already owned to the specialty channel.
That said, Charron was quick to acknowledge that acquisitions will continue to remain important to the company’s maintenance of long-term core growth. The current environment, he noted, could bring some good opportunities, provided that they meet the firm’s strategy of being financially attractive with manageable risks.
About five of the existing Liz locations will be converted to either a Mexx or Sigrid Olsen format. A total of five Mexx sites are planned in the U.S. this year, and the first will open at what is now Liz Claiborne’s 17,000-square-foot Manhattan flagship at 650 Fifth Avenue in New York. Based in the Netherlands, Mexx is a designer and marketeer for women’s, men’s and children’s apparel, and is sold in over 7,500 locations in 40 countries. The U.S. stores will feature apparel and accessories targeting men and women between ages 20 and 40.