NORTH BERGEN, N.J. — It might have been Paul Charron’s last annual meeting as the chairman and chief executive officer of Liz Claiborne Inc., but he ensured shareholders on Thursday that the company would go through continued growth after he is gone.
The $4.8 billion firm ended 2005 with its 40th consecutive quarter of sales growth. Although first-quarter sales were down 3.4 percent at Liz, Charron said 2006 is sure to be an even stronger year, with more store openings, brand launches and acquisitions as well as aggressive international growth planned.
“The shareholders expect more than we’re delivering,” he said last month. “We expect to deliver more in the out quarters.”
Overall, 2005, was a good year for the firm.
“Direct-to-consumer sales accounted for 25 percent of total revenues, up from just 18 percent in 2001,” said Charron, speaking to about 45 shareholders and board members at company headquarters here. He noted there are plans for more store openings before the end of 2006, including 35 Lucky Brand Jeans stores and between 25 and 30 more Sigrid Olsen stores.
“We will also expand our Juicy Couture retail stores to build on their phenomenal success, carefully selecting locations in affluent venues that reinforce the cachet essential to the brand’s appeal. From a base of three Juicy Couture stores today, we plan to open eight to 10 new locations in international and domestic markets in 2006,” he said.
In addition, Charron highlighted the growth of Mexx in Europe, with 141 stores in 13 countries and 291 concession stores throughout Europe. However, he said there is still another success story in Europe with the Monet and Co. brand, which operates six stores offering Liz Claiborne, Monet and Ellen Tracy jewelry, handbags and accessories in France and the Benelux countries. The firm plans to open three more of those stores by the end of the year.
With the changing retail landscape and advances in technological devises such as iPods and plasma TVs that capture the customer so they spend less on apparel, Charron said company-owned specialty stores are essential to the company’s future.
“We frequently have great product,” he said. “But department stores don’t always buy or present it to maximize its appeal to the ultimate consumer. Our ongoing investments in direct-to-consumer businesses, while capital-intensive, will enable us to position and support our brands to best advantage.”
In addition, Charron cited a 34 percent sales jump online, from brands such as C&C California, Juicy Couture and Prana. He said that 2006 will also bring increased e-commerce sales for the brands in the portfolio offered online.
Charron said the company has also invested in technology, which will help with cost-cutting and speed to market. This new technology, which is a register-linked system called Customer Relationship Management, gives the company a better link to consumers, gathering data to see what they are buying and when they are buying it.
Charron said the company went through a rare restructuring process, which contributed to about $60 million in cost-cutting. While this involved the loss of 500 employees, it was a necessary action for future growth, he said.
“We firmly believe that our multibrand, multichannel strategy is the right one,” Charron said. “Execution, however, needs to improve, and we now have in place a more agile organization that is better prepared to address the rapidly changing marketplace.”
He said the company remains interested in acquiring new brands to add to the portfolio of 46. He said acquisitions have to make “financial sense” for the company with “distinct positioning and untapped potential.”
While no hints were given as to a replacement for Charron, who will step down on Dec. 31, he reassured shareholders that the board is aggressively searching for his replacement.