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.

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