William L. McComb believes Liz Claiborne Inc. is now “at a critical inflection point” where a years-long overhaul will put it on an upward trajectory, even if the consumer doesn’t come roaring back.
It’s a stake in the ground for McComb, chief executive officer and architect of the firm’s strategy, which has shipped the Liz Claiborne brand off to J.C. Penney Co. Inc. as a license, turned to Erin Fetherston to design Juicy Couture, cut inventory at Lucky Brand Jeans and installed new leadership at the ailing Mexx division.
McComb told WWD that the company is “a study in simultaneousness” with various initiatives “independently coming together.” And the shift is not reliant on a big turnaround in consumer spending, the prospects for which the ceo is relatively bearish. “This is an internally driven story,” he said. “Our act is coming together. The profit equation of our operation is coming together.”
Any unqualified statement of profitability — or, in this case, a return to adjusted operating profits in the second half to allow for some fiscal wiggle room — is a big deal for Claiborne, which has posted 11 consecutive quarters of net losses.
Even if Claiborne does return to the black, it remains very much an open question if the company can return to the position of prominence it once held in an industry renowned for ups and downs.
For their part, investors gave the company a big thumbs-up Thursday, pushing the stock up 69 cents, or 13.8 percent, to $5.68, its highest closing price since June 15.
Although net losses widened in the second quarter, adjusted losses tallied 19 cents a share, less severe than the 46 cent deficit Wall Street expected.
Claiborne expects second-half adjusted sales to fall 9 to 14 percent, but gross margins are slated to perk up 500 basis points as the Mexx business improves in Europe and the Liz Claiborne brand begins pulling in licensing dollars from Penney’s. That is expected to translate into adjusted operating profits of about $32 million for the second half.
Given the $100 million operating loss in the first half, that would still leave Claiborne in the red this year, but finally pointed in the right direction.
And that switch in momentum, should it come, will play out over an economic landscape that McComb described as “a prolonged stagnation. “
“You’re hearing good things and bad things both,” he said. “It’s just that there’s an absence of the rebound effect.
“While we feel good about the potential for second-half improvement, we are also realistic,” he told analysts on a conference call. “We still have a long way to go and a lot to prove. But from our perspective, we’re at a critical inflection point. We believe we are on the right track and looking forward to the future.”
Second-quarter net losses attributable to Claiborne widened to $86.8 million, or 92 cents a share, from $82.1 million, or 87 cents, a year earlier.
Sales for the quarter ended July 3 fell 15.5 percent to $569.8 million from $674.6 million. The retreat included a 19.4 percent decline at Lucky Brand, where the company aggressively adjusted inventories; a 13.8 percent drop at the division that includes Mexx, and a 28.8 percent decline in the firm’s partnered brands business as the Liz Claiborne brand makes the shift to a licensing-based model.
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion
“I’m Russian and I love to use all these little tricks that I got from my grandma or my mom. We didn’t have a lot of money for creams or anything like that so we would use a garden as a beauty treatment regime. We’d put cucumber in the fridge and do a cucumber mask,” says model @irinashayk on one of her beauty hacks. WWD asked celebs what their go-to self-care rituals are. See what Naomie Harris, Freida Pinto and more said on WWD.com. #wwdeye #wwdbeauty (📷: @zefashioninsider)
Exclusive: @viktorandrolf are teaming up with @Zalando on a collection made from leftover clothing. The lineup, which lands at the retailer February 1, includes 17 pieces adorned with sliced up and repurposed overstock from the retailer’s private label collection. Pictured here is a look from the collection –– see more on WWD.com. #wwdfashion #wwdnews
@duewestnyc is the newest bar joining the collection of intimate neighborhood-focused spaces in the West Village. The cocktail menu, which includes bitters and syrups made in-house, offers a “Build Your Own Old-Fashioned” – like the one pictured here – where guests can choose from a list of spirits and unexpected sugars and bitters. #wwdeye
Spotted at last night’s National Board of Review gala in NYC: Angelina Jolie. Jolie – along with Meryl Streep, @lupitanyongo and more – continued the all-black dress code from Sunday’s Golden Globes. #wwdeye (📷: @lexieblacklock)