NEW YORK — William L. McComb might just want to keep some Extra-Strength Tylenol handy.
After selling off, shutting down and licensing many Claiborne brands the last three years, two of the company’s chief assets, Juicy Couture and Lucky Brand Jeans, are now both undergoing creative leadership changes this year — which were instigated by the chief executive officer of Liz Claiborne Inc. himself.
Meanwhile, the group’s namesake brand is undergoing its third reinvention during the McComb era as the main portion of the line becomes exclusive to J.C. Penney and the Isaac Mizrahi-designed Collection goes to QVC.
The changes mean three of the $4 billion company’s four core brands — the other being Kate Spade — will be undergoing major transformations this year, a year that initially was expected to see some stability finally arrive at the firm after 39 months of upheaval and restructuring.
Meanwhile, Claiborne has a major new investor who could bring pressure to bear on the firm’s management. Perry Capital has amassed a 9.7 percent stake in Claiborne, making it the company’s second-largest shareholder, according to a filing with the Securities and Exchange Commission. The hedge fund did not respond to requests for comment, and its intentions regarding its Claiborne stake could not be learned.
So, far from seeing calm return to the hallways of the Claiborne empire, as expected, McComb might be facing a few more headaches.
As their three-year contract stipulates, Juicy’s co-founders and co-designers, Gela Nash-Taylor and Pamela Skaist-Levy, are taking on a non-operating creative consulting role at the company this year, the final year of their contract, and Claiborne is searching for a creative director to succeed them.
At the same time, Claiborne has replaced Lucky Brand co-founders Gene Montesano and Barry Perlman with David DeMattei, ceo, and Patrick Wade, executive vice president and creative director, effective Jan. 4. Montesano and Perlman are also in the final year of a three-year contract which stipulates they, too, step back from day-to-day responsibilities and take non-operating creative consultancy roles. Again, Claiborne is looking for a new direction at that brand, as well.
Skaist-Levy and Nash-Taylor seem to be taking their departures in stride, and already are cooking up another lifestyle collection once their non-compete clause runs out.
“It’s [Claiborne’s] vision going forward. We’re creative consultants. They’ll call us up. It’s like letting your baby bird fly out of the nest on its own,” said Nash-Taylor, who founded Juicy Couture with Skaist-Levy in 1996 and sold it to Claiborne in 2003 when it was generating $50 million in sales.
But retailers admitted that Juicy, which has had a strong growth trajectory for most of its history and racked up sales of $605 million in fiscal year 2008, has started to fray around the edges and needs to be reenergized. Stores have cut back on the merchandise and reduced square footage of their in-store shops, complaining of quality and fit problems (“the pants need to fit better,” said one retailer) and a lack of newness beyond the core tracksuit.
Despite even more transitions for the company, McComb is viewing the moves positively.
“We weren’t hiding this. It’s a molehill, not a mountain,” said the ceo, discussing the Juicy designers’ changing roles.
McComb said that was the expected pattern for the two designers, “who have a lot of money and a rich life.” The switch to non-operating roles in the third year has always been in their contract. “It’s not material to the total corporation,” he said, explaining that’s why there was no obligation to file their contract with the Securities and Exchange Commission. “In a monobrand company called Donna Karan, you have to, but in a $4 billion conglomerate, it’s a different story.”
But as one market observer pointed out, “The brand is the girls. It’s their personality. P&G [Pam and Gela] is all part of the allure. People are buying into that.”
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