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NEW YORK — Economic and retail weaknesses weren’t sufficient to slow down Liz Claiborne Inc., which posted a 15 percent increase in third-quarter earnings Thursday.

This story first appeared in the October 18, 2002 issue of WWD.  Subscribe Today.

For the three months ended Sept. 28, the apparel giant reported net income of $83.5 million, or 78 cents a diluted share, compared with $72.6 million, or 69 cents, in the year-ago period. Sales rose 3.3 percent to $1.04 billion from $1.01 billion.

Six years after acquiring the trademarks, Liz Claiborne Inc. will launch the J.H. Collectibles brand for spring in department stores, bringing back a brand that was once a rival of Liz Claiborne in the better sportswear arena. On a conference call, Claiborne chairman and chief executive Paul Charron said the resurrected line “fills the desire of department stores for a new traditional offering, giving [them a line to compete] with J. Jill and Chico’s.”

Charron said that, despite a challenging economic landscape, the company’s product has been “performing relatively well overall and our inventories are in good shape.” The results for the quarter, he noted, indicate that Liz’s “portfolio diversification strategy is a key factor in delivering positive results.”

Responding to questions from the investment community about Liz’s relatively weak position in the discount channel in comparison to its status among “upstairs” retailers, Charron stated, “Our distribution and brand portfolio is balanced to deliver fashion goods, lifestyles and the pocketbook of consumers in each retail format. What differentiates our portfolio is not price, but fashion at a price. In fact, it is fashion at a number of prices.”

Shares of Liz vaulted $2.09, or 7.7 percent, to close at $29.12 in New York Stock Exchange trading Thursday.

Bottoms was a driving force in the growth of Liz’s modern brands,while the performance of sweaters was hampered by mild weather. Denim remained strong and generated 55 percent of total sales at Liz’s Lucky Brand.

Sales were healthy among the core brands at Liz, with the exception of Elisabeth, which reflected the overall recent softness in the large-size women’s market.

While J.H. Collectibles’ history was as a better brand with annual sales of about $100 million, in this incarnation it will be positioned as a moderate-priced sportswear line, opening in 584 retail doors and offered in misses’ and plus sizes.

“J.H. Collectibles is a perfect complement to our Emma James business, which is also very feminine but tends to be more tailored and structured,” said Helen McCluskey, president of Special Markets at Liz. Retail prices will range from $20 to $69. It has been off retail shelves since its October 1996 bankruptcy.

The company said it expects a sales increase in the fourth quarter of between 7 and 9 percent and earnings per share of 57 to 58 cents. For fiscal 2003, the company expects sales to increase between 9 and 11 percent, and EPS to land between $2.47 and $2.52. The estimate includes EPS accretion for fiscal 2003 of between 5 and 7 cents resulting from the Ellen Tracy acquisition.

For the nine months, income was up 15 percent to $173.2 million, or $1.62 a diluted share, from $150.6 million, or $1.43, last year. Sales increased 6.3 percent to $2.72 billion from $2.56 billion.