Claiborne Reiterates Focus on Product

William L. McComb hosted his first annual shareholders meeting not in Liz Claiborne Inc."s North Bergen, N.J., headquarters where it"s typically held, but at the Liz Claiborne brand showroom at 1441 Broadway here.

NEW YORK — William L. McComb hosted his first annual shareholders meeting not in Liz Claiborne Inc.”s North Bergen, N.J., headquarters where it”s typically held, but at the Liz Claiborne brand showroom at 1441 Broadway here.

Claiborne”s chief executive officer called his venue choice “a symbolic gesture” representing the company”s focus on product, as he, president Trudy Sullivan and Michael Scarpa, chief operating officer and chief financial officer, sat between mannequins modeling the firm”s namesake brand.

More than 50 shareholders, company officers and reporters came to hear what was largely a rehashing of Claiborne”s grim first-quarter earnings call two weeks earlier, when the company reported that earnings crashed 65.5 percent.

“As someone from outside the fashion industry, I also believe I can bring a level of objectivity to the company — and its strategies — that will be critical at a time of such intense industry change,” McComb said.

He again told his May 1 story about Claiborne”s “tale of two cities.” While the $4.99 billion firm”s retail side is enjoying double-digit sales growth with expanding square footage and increasing doors, the wholesale side is facing “significant challenges,” including retailers” reliance on private and exclusive brands, decreased consumer demand for traditional better and bridge sportswear and department stores” new strategy of improving “natural margins.” (See related story on Sigrid Olsen, page 10.)

“For the upcoming fall season, we”re de-emphasizing volume, instead focusing our efforts on making actual department store buys work harder,” McComb said. “While this change will be good for the business overall, it will hurt 2007 profitability.”

McComb postponed detailing the firm”s growth strategy until the promised July 11 half-day investor meeting, during which he promised to lay out details for the next three to 10 years.

During the question-and-answer portion, two shareholders asked McComb about the fit and styles of particular lines, including the men”s Claiborne line and women”s Liz Claiborne brand.

“I couldn”t get enough of Liz Claiborne many, many years ago, but I am no longer a customer,” said one woman. “I would like to continue to support Liz Claiborne, if it supports me in style and color.”

This story first appeared in the May 18, 2007 issue of WWD.  Subscribe Today.

McComb, who chose the Liz Claiborne brand”s showroom venue to accentuate his focus on creating “irresistible product,” said he was “proud to hear shareholders come to talk about product.”

A People for the Ethical Treatment of Animals representative called on Claiborne to enact a permanent no-fur policy for all of its brands, five of which in its 40-plus portfolio use real fur. McComb stood by the use of fur in brands like Juicy Couture, Ellen Tracy and Dana Buchman.

“Because our brands range in price point and lifestyle, there are those at the upper better and bridge price points that use fur and feel they need to have fur on their lines to meet competitive and consumer demands,” said McComb. “That said, we did decide to discontinue the use of real fur on both apparel and accessories for those brands that we sell at the better price point or below. This was executed beginning with the fall 2007 season.”

The PETA spokesman also applauded Claiborne for not using merino wool from Australia, where, according to PETA, the backsides of lambs are mutilated in a procedure called “mulesing” — the result of a previous dialogue with PETA. McComb invited a representative from PETA to address Claiborne”s design community in late July.

In other business, Mary Kay Haben”s term as a director expired Thursday, while directors Kenneth P. Kopelman, Raul J. Fernandez and Arthur C. Martinez were reelected by an 80 percent shareholder vote. At the same time, shareholders rejected adopting a proposal to change board elections from requiring a plurality to requiring a majority vote.

Chairman emeritus Paul Charron, the face of Claiborne”s annual shareholders meetings for the past decade, was not in attendance because he was vacationing in Nantucket.