Now that William L. McComb, chief executive officer of Liz Claiborne Inc., has a handle on the company’s debt, he’s not about to hand over too much control of his brands to outside merchants.
The company — which posted a $60.6 million first-quarter loss, but topped sales expectations and saw its stock shoot up 9.5 percent Thursday — now has a solidly retail profile. And McComb said he is taking a friendly, yet calculated approach with its wholesale customers given the company’s past experience with Juicy Couture.
Wall Street is looking for big things from the firm’s Kate Spade brand, which posted a 73 percent comparable-store sales gain in March. One analyst asked how the company was thinking about the brand’s wholesale opportunities.
“Carefully,” McComb said. “I’ll be blunt — more carefully than Michael Kors. I say that because a lot of you have asked that question. But it’s in-line growth, we have great strategic partners with wholesalers. We want to keep them strategic partners.
“They help us position the brand,” the ceo said. “We have the right adjacencies. And there is absolutely growth to be had in wholesale, and our wholesale partners know it. And they’re good partnerships, and we’re going to do it. We’re just not going to do what unfortunately happened to Juicy a few years ago, which is it got out of hand and got out of control.”
McComb later explained that department stores had such success selling Juicy tracksuits that “they didn’t take the brand where we were taking it in the full-price stores.”
Kate Spade, he said, gets a fuller presentation from its wholesale accounts. “One thing that [divisional ceo] Craig [Leavitt] and his team are really, I’m going to say, insistent about with the department stores is that the line have a certain critical mass and that a certain number of categories are represented. And they’ve even had breakthroughs with partners like Nordstrom in getting multiple categories co-merchandised.”
Juicy is still in turnaround mode and is rolling out designs that reflect the vision of LeAnne Nealz, who is chief creative officer and now sole president of the brand. David Bassuk joined the brand as co-president in February, but is returning to consultancy AlixPartners, where he will help run the retail practice. He will continue to work with the company as a consultant.
Juicy’s comps fell 3 percent in March, following declines of 2 percent in February and 8 percent in January. Lucky Brand’s comps gained 18 percent last month.
Claiborne’s net losses for the quarter translated into 60 cents a share and compared with year-ago losses of $96.3 million, or $1.02 a share. The company, which will change its name to Fifth & Pacific Cos. Inc. next month, said adjusted losses before interest, taxes, depreciation and amortization narrowed to $1 million from $4 million a year earlier.
Sales for the three months ended March 31 slipped 4.1 percent to $317.1 million from $330.7 million. Despite the decline, Claiborne’s sales for the quarter topped analysts’ expectations by nearly $10 million. That helped push the stock up $1.20 to $13.88.
Claiborne ended the quarter with debt of $317 million, down from $698 million a year earlier. The company continues to forecast adjusted EBITDA of $125 million to $140 million for the year.