Shares of Fifth & Pacific Cos. Inc. shot up 22 percent Thursday after the company narrowed its second-quarter loss and stood by its full-year guidance, saying strength at Kate Spade would offset a stumble at Juicy Couture.
Fifth & Pacific’s stock gained $2.03 to $11.28 — the biggest percentage gain since the company said in October that it would sell the Liz Claiborne brand to J.C. Penney Co. Inc. and pay down debt.
Corinna Freedman, an analyst at Wedbush Securities Inc., said some investors were betting the firm would back away from its guidance because of weakness at Juicy.
“They remain on track, and they originally said Juicy could be a little bit worse but that it could be offset by better results at Kate,” Freedman said.
The analyst also noted that Kate Spade has gone on the offensive in reaction to competition from Michael Kors and Tory Burch. The brand currently has 83 doors and plans to open an additional 40 to 45 by the end of next year.
Overall, Fifth & Pacific’s net losses tallied $52.1 million, or 48 cents a share, which compared with red ink of $89.9 million, or 95 cents, a year earlier. Adjusted losses from continuing operations were 9 cents a share, better than the 12 cents analysts expected.
Sales for the three months ended June 30 fell 6.5 percent to $335.9 million from $360.3 million.
Kate Spade saw operating profits of $2.1 million for the quarter as sales grew 48.1 percent to $100.9 million. The brand is now almost as large as its corporate cousins Lucky Brand and Juicy.
Lucky’s operating losses totaled $11.5 million as sales gained 15.3 percent to $112 million. Juicy turned in operating losses of $23.6 million on a 10.4 percent decline in sales to $104.9 million.
Chief executive officer William L. McComb told analysts on a conference call that the new Juicy product launched earlier this year has been well received but that the brand has “many operational challenges to fix.”
McComb said Juicy cut back too much on inventory.
“For each of the deliveries from January through June, we initially allocated anywhere from 20 to 30 percent fewer units,” McComb said. “This was the result of being overly conservative, but equally, just plain poor planning.” To help fix the operational issues the brand named Tom Linko chief financial officer last month.
Juicy’s outlet business is also lagging as the stores try to clear merchandise that was made before the brand’s recasting this year. McComb also acknowledged that the brand’s handbags “lacked the relevance, newness and punch we needed.”
Even so, McComb said he remained “quite optimistic” since the brand has made progress reestablishing its image.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast