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Reshaping Claiborne: Liz Faces Challenges Selling Off 16 Brands

After a decade of frenzied acquisitions, Liz Claiborne Inc. is having a garage sale of many of its brands.

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- Sourcing companies like Li & Fung. With a parent with a low-cost sourcing capability, the brands could become more profitable even if sales remained flat.

- Brand management companies such as Iconix Brand Group Inc., NexCen Brands Inc. and Cherokee Inc.: Claiborne has said it was not sufficiently marketing the brands to achieve maximum growth, so companies known for their marketing strategies could be a good match. These firms are also not above taking brands down-market where the names are still perceived as aspirational. "They will try to reinvigorate the brand from whatever channel that growth could come from," said Cooper.

- Smaller vendors like G3 Apparel Group, Delta Apparel Inc. or many other midsize Seventh Avenue vendors: The brands that were too small to garner sufficient attention at Claiborne could become a focal point for a smaller vendor. According to McComb's own mantra, focus and attention beget results. But consultant Emanuel Weintraub asked, "If the big guys don't want to buy it, can the small guys afford to pay for it?"

- Foreign vendors: Henderson thinks brands like Ellen Tracy, Laundry by Design and Dana Buchman may attract European companies looking for an entrée into the U.S., in the same way Apax Partners bought Tommy Hilfiger last year.

- Private equity companies: These firms live for a turn-around opportunity, although many of the brands could be perceived as mature or in weak channels. Plus the brands need a back end, so the company would need to already have a foot in apparel.

- Founders or management of brands could make an internal buyout at a discount market rate. Dana Buchman said she would be interested in taking a financial stake in her namesake brand with a business partner.

While Mark Walsh, who was promoted in February to group president of "portfolio brands," runs the day-to-day business for the reviewed companies, Robbie Karp, Claiborne's senior vice president of business development, legal and corporate affairs, is running the review process internally. Along with Centerview Partners, Karp is combing through lists of potential buyers to separate out the most serious candidates, which by the end of the summer will receive confidential looks at the due diligence books for each brand that Centerview is putting together.

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