With shares of Liz Claiborne Inc. falling to historic lows, William L. McComb, chief executive officer, tried to ease some frayed nerves at the company by speaking directly to employees, explaining the decline and reassuring them that a lower stock price does not add up to a liquidity problem.
“From where I sit, there is a ‘perfect storm’ of circumstances that, combined, seem to affect our stock price more than others,” said McComb in an e-mail sent to employees Friday, a copy of which was obtained by WWD.
The firm’s shares declined 25.8 percent Friday and slid a further 1.4 percent, or 5 cents, Monday to $3.64 — the lowest closing price since the company went public in 1986. That leaves the stock down 86.3 percent from its 52-week high. Among the competition, Jones Apparel Group Inc. ended Monday down 71.5 percent from its high for the prior 12 months, as Phillips-Van Heusen Corp. was down 65.1 percent and Polo Ralph Lauren Corp. was off 51.1 percent.
The confluence of events cited by McComb included a somewhat more bearish outlook from the company than what some competitors have given; downward sales trends among the firm’s customers including Macy’s Inc., Nordstrom Inc. and J.C. Penney Co. Inc.; a credit facility that expires at the end of October 2009 and has yet to be renewed, and technical trading restrictions for some institutional investors.
“In the past, our stock has been held by many midcap funds that believe in the company and would like to be in it for the long haul,” McComb said in his letter. “However, these funds often have strict market capitalization minimums (which are tied to the stock price). As soon as a company’s stock falls below these levels, there are automatic, computer generated sales of the stock, causing us to fall faster and harder than others around us.”
A sell-off was triggered when the company’s stock fell below $5, a price plane Claiborne broke on Nov. 12, two days after it reported a third-quarter loss of $68.7 million on a 16 percent sales decline.
“Without question, it is difficult — indeed sickening — to watch our stock fall, but I believe, and investors have told us, that the value of our company is greater than the current market price,” McComb said.
“What does a falling stock price mean?” he asked. “In and of itself, it does not change the amount of liquidity we have to run our business. It does signal a lack of investor interest in our sector and our company during this very risky quarter.”
In the face of these challenges, McComb also tried to buck up his workforce: “We must focus on what each of us has to do every day. And, we must stay strong and fight through this together.”
Employees want to hear about the state of the business in a language they can understand, the ceo told WWD Monday.
“They almost want us to blog,” McComb said. “They don’t just want us to be announcement-based in how we communicate with them; they want us to provide context when the news is so almost unbelievably hard to process. People just appreciate management talking in times like this. A cone of silence is not your friend. Your employees are your most important social network and you’ve got to treat them with some intellect.”
McComb also expressed optimism about the company’s relaunch of its namesake brand under the direction of Isaac Mizrahi next year.
With the markets roiled as they have been by the credit crunch and the economic slowdown, the company might get limited credit for the steps it’s taking to turn around operations.
“Investors aren’t putting money in retail right now,” McComb said.
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye
Did you know: @carlychaikin of "Mr. Robot" has been painting for about a decade? The actress, who plays Darlene on the show, is a self-taught artist who lists Salvador Dalí and Chuck Close as some of her idols. Chaikin told WWD that painting is a form of meditation for her — A much-needed one given the intensity of "Mr. Robot." See a piece Chaikin is working on at WWD.com (📷: @jilliansollazzo) #wwdeye