NEW YORK — Fifth & Pacific Cos. Inc. is deciding whether to convert its Juicy Couture store on Fifth Avenue here into a Kate Spade unit or recognize benefits from exiting the lease for the unit altogether.
The company, which reported a lower third-quarter loss on an 18.1 percent increase in revenues Thursday, completed the sale of the intellectual property of Juicy to Authentic Brands Group Inc. for $195 million in cash earlier this month. It expects net proceeds of between $125 million and $135 million from the divestiture of the IP component of the brand.
“We believe proceeds from a transaction resulting in exiting this lease are likely to materially improve the total net proceeds resulting from our decision to sell and exit the Juicy Couture business,” said William McComb, chief executive officer of Fifth & Pacific. “We are also weighing this opportunity against the merits and economics of converting the Fifth Avenue store into a Kate Spade store. We expect to finalize our decision in the near future.”
According to a spokeswoman, the space at 650 Fifth Avenue is 17,000 square feet, which includes two selling floors and a basement.
Fifth & Pacific remains intimately involved in the Juicy business as it has a licensing agreement with, and a related $10 million minimum royalty payment due to, Authentic for the brand through the first half of next year.
The third-quarter results offered no resolution of the company’s search for a buyer for the Lucky Brand division. “We are not prepared at this time to make comments on any process or decisions about Lucky Brand,” McComb said.
In the three months ended Sept. 28, the company reduced its net loss to $16.9 million, or 14 cents a diluted share, from a loss of $18.8 million, or 17 cents, in the 2012 period. Adjusted losses per share for continuing operations were 3 cents, deeper than the 1-cent loss expected, on average, by analysts. The year-ago adjusted loss was 5 cents a share.
Revenues essentially matched analysts’ estimates, rising 18.1 percent to $430.6 million from $364.6 million. Kate Spade expanded 76.4 percent, to $179.7 million, as its comparable sales from stores and e-commerce grew 31 percent. Lucky’s sales were up 7.2 percent, to $120 million, on a flat comp performance.
Gross margin improved to 56.5 percent of sales from 55.7 percent a year ago.
In the nine months, Fifth & Pacific’s net loss dropped to $112.2 million, or 93 cents, from $131.5 million, or $1.22. Revenues were up 16.3 percent, to $1.18 billion from $1.01 billion.
McComb said in a conference call to Wall Street analysts that product trends in Kate Spade include “very strong growth in small leather goods and in handbags.” Apparel continues to be the strongest category at Kate Spade Saturday, which skews to a younger consumer profile that is also “more likely to come back and shop more often.”
He said on the call, “With respect to the Juicy store fleet, we anticipate converting a number of Juicy stores to Lucky Brand and Kate Spade New York.”
Shares of Fifth & Pacific Thursday rose 4.2 percent to close at $28.89 in trading on the New York Stock Exchange.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)