NEW YORK -- Liz Claiborne Inc. is expecting a "significant" improvement in earnings this year after a rough 1993.
The 1993 figures, scheduled to be released in mid-February, will show a drop of about 40 percent, about what the company had previously predicted. Earnings for 1993 are expected to come in at around $125 million, against $219 million in 1992.
Jerome A. Chazen, chairman and chief executive officer, said Wednesday that 1994 will be "an
OK year" and translated that to mean a significant improvement over 1993. Sales last year were ahead marginally, he said.
"We'll still be doing some catching up in the first and second quarters of the year, but we should have good gains in the second half," he said.
In a wide-ranging interview, Chazen covered the outlook and operations of each Claiborne division. He predicted explosive growth for Villager, but said it's still a couple of years away. Meanwhile, Villager and the two other brands purchased from Russ Togs, continue to lose money.
Chazen said the goal for 1994 is to bring margins in the sportswear division, which he said makes up about 50 percent of Claiborne's $2.2 billion volume, back to 1992 levels. He said this will be achieved by selling less merchandise and by refocusing the three sportswear divisions: Liz Claiborne Collection, LizSport and LizWear.
"We hope this will improve our margins and lead to a bottom-line improvement," Chazen said. "One of the things we noticed in sportswear, in looking at our position in the stores and through consumer focus groups, was that there was a certain amount of redundancy and duplication within the three divisions."
He said the studies showed three things about consumers:
They didn't know the difference between the three labels.
They were all the same consumer, even though the company thought there was a difference, such as Sport being a younger consumer.
The company was "imploding upon itself" because the divisions were too often competing with themselves.
"Now we've taken each division and given it a separate focus," Chazen said.
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