NEW YORK — William L. McComb’s protracted and often painful effort to reinvent Liz Claiborne Inc. has produced a series of businesses that are bleeding money and struggling through turnarounds, and one breakout star that just might be the company’s saving grace: Kate Spade.
Claiborne’s loss for the fourth quarter ended Jan. 1 narrowed to $30.1 million, or 32 cents a diluted share, from $41.7 million, or 45 cents a year earlier, but McComb, chief executive officer since late 2006, lowered 2012 profit targets and served up a collection of bad news for Wall Street, sending shares down 7.2 percent to $5.
Adjusted earnings before interest, taxes, depreciation and amortization for 2012 are now expected to range from $180 million to $220 million, less than the goal established a year ago.
On a conference call with analysts, McComb said Kohl’s Corp. would drop Claiborne’s Axcess brand following the spring season, wiping out a profitable business with $70 million in sales. He said the brand would likely be replaced by Kohl’s new Jennifer Lopez and Marc Anthony offerings and that other retailers are looking at Axcess.
And Juicy Couture, once seen as the crown jewel of the New Liz Claiborne, saw December comparable-store sales fall 5 percent with the weakness projected to continue as the brand works off excess inventory.
But Kate Spade has come into its own and is moving into a central role at the firm.
The brand’s sales shot up 30.5 percent last year to $184.3 million, with retail sales of $666 a square foot. The brand has 44 stores and will get a big portion of the 30 to 35 new stores Claiborne plans to add this year.
“Kate Spade can no longer be viewed as too small to matter for our company,” McComb told WWD. “The business is very profitable and strong across all channels, all product categories and in all geographies.”
He described it as a “very Web-savvy” brand striving to connect retail and e-commerce.
Jim Chartier, an analyst at Monness, Crespi, Hardt & Co., said Kate Spade was “probably the most valuable piece of the business right now.” He pointed to accessories firm Vera Bradley Inc., which went public in October and is valued at about four-times sales.
Assuming sales this year of about $250 million at Kate Spade, Chartier said business could garner as much as $1 billion.
By contrast, the value of all of Claiborne’s stock and debts minus its cash — a baseline price to buy the whole company — is currently $1.23 billion.
For the full year, the net loss dropped to $251.5 million, or $2.67 a diluted share, from $305.7 million, or $3.26. Revenues fell 14.3 percent to $2.5 billion from $2.92 billion.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty