NEW YORK — Liz Claiborne Inc. is now Fifth & Pacific Cos. Inc. and William L. McComb, its chief executive officer, is on the offensive.
This story first appeared in the May 15, 2012 issue of WWD. Subscribe Today.
Gone is the apparel manufacturer that put a generation of working women in pantsuits and grew into a portfolio-centric company with more than 30 brands. The Liz Claiborne brand was sold to J.C. Penney Co. Inc. last year while a majority of the ailing Mexx division was spun off along with a number of other assets, and the proceeds were used to cut the company’s debt load to $317 million from $698 million just over a year ago. The changes sparked the name change, which was revealed in January and will be made official today when the company’s stock will start trading under the ticker FNP.
Now the company revolves around Kate Spade, Juicy Couture and Lucky Brand — three brands that were bought with free cash flow provided by the Liz Claiborne business. The brands have grown into retailers in their own right, with domestic wholesale revenues accounting for only 10 to 15 percent of their U.S. top line.
“These businesses are in what I would call true start-up mode,” said a relaxed and upbeat McComb in an interview Monday. “There’s a tremendous amount of entrepreneurship in the businesses. The culture is these are hard-working, lean, fast-moving and superinnovative teams. They’ve inventing as they go along. They’re not running the bases of well-established processes in a big machine that’s been humming and running smoothly. They’re, all three, hungry, scrappy start-ups. We have three simultaneously early-stage companies.”
McComb finally seems to have positioned the company to his liking.
“The last six months have been very different,” the ceo said, a Fifth & Pacific logo spinning behind him on his desktop screen saver. “The best way to express it is a shift from being 75 percent defense to 75 percent offense.”
Kate Spade, with comparable sales per square foot at $989 for the past 12 months, is charging ahead, as Lucky Brand found its footing with sales of $448 a square foot.
New Juicy Couture product was introduced this year, the brand’s sales are at $661 a square foot and McComb said the business is about a year behind Lucky in its reinvention.
Like everyone else in the industry, McComb has taken note of Michael Kors Holdings Ltd.’s initial public offering and its market capitalization of $7.75 billion and said his company can grab a bigger part of the booming handbag business.
“[The consumer’s] putting more of her apparel and accessories dollars into what I would call ‘investment-grade handbags,’” McComb said. “I think it has another five- to 10-year run in it. I see all ships rising with the growth of fast-growing brands like Kate and Michael Kors. I think you’ll see Juicy stake out some really nice territory there over the next two to three years.”
The sweet spot for the investment-grade handbag is the $298 to $498 price range, he said.
McComb said Fifth & Pacific’s results would ultimately speak for themselves.
“There were some tough times,” he admitted of his tenure. “I’ve never minded being underestimated. I would much rather be the underdog in a situation or to be discounted and misunderstood.…It’s very important that as a lead of a company that you lean into a future, that you actually are driving an organization toward something and not from something.”