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Fifth & Pacific, Li & Fung End Distribution Deal

Former employees to be offered employment by third-party provider.

Fifth & Pacific Cos. Inc. has moved its distribution functions back to a company-owned facility in Ohio following the expiration of an agreement for those services with Li & Fung Ltd. that dates back to 2011.

Fifth & Pacific has reached an agreement with Ridge Global Inc., a Kearny, N.J.-based provider of business services, to operate the distribution center in West Chester, Ohio. The approximately 150 individuals employed by Fifth & Pacific at the facility, and whose employment was covered by an extended collective bargaining agreement, will be offered employment by Ridge.

“The decision was based on the complex distribution needs of our businesses and the ability, through Ridge, to run a more efficient operation with compelling financial benefits,” said a spokeswoman for F&P. “We are happy in the end with the economics, the service levels made possible and the continuity provided by this arrangement.”

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David Telesco, president of Ridge, told WWD that his firm is conducting talks with the former Fifth & Pacific employees to reach a new labor agreement. “This process is moving along well,” he said.

The Li & Fung distribution and warehousing arrangement followed a previous pact, signed in 2009, under which L&F would take responsibility for all sourcing by Fifth & Pacific, then still known as Liz Claiborne Inc. That arrangement remains in effect, although the company refunded a portion of the proceeds collected in connection with it from L&F in 2010 following the sale of the Liz Claiborne trademark to J.C. Penney Co. Inc. The company received $83 million under terms of the arrangement and refunded $24.3 million of it to L&F, according to filings with the Securities and Exchange Commission.