NEW YORK — Fifth & Pacific Cos. Inc. is deciding whether to convert its Juicy Couture store on Fifth Avenue here into a Kate Spade unit or recognize benefits from exiting the lease for the unit altogether.

This story first appeared in the November 8, 2013 issue of WWD. Subscribe Today.

The company, which reported a lower third-quarter loss on an 18.1 percent increase in revenues Thursday, completed the sale of the intellectual property of Juicy to Authentic Brands Group Inc. for $195 million in cash earlier this month. It expects net proceeds of between $125 million and $135 million from the divestiture of the IP component of the brand.

“We believe proceeds from a transaction resulting in exiting this lease are likely to materially improve the total net proceeds resulting from our decision to sell and exit the Juicy Couture business,” said William McComb, chief executive officer of Fifth & Pacific. “We are also weighing this opportunity against the merits and economics of converting the Fifth Avenue store into a Kate Spade store. We expect to finalize our decision in the near future.”

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According to a spokeswoman, the space at 650 Fifth Avenue is 17,000 square feet, which includes two selling floors and a basement.

Fifth & Pacific remains intimately involved in the Juicy business as it has a licensing agreement with, and a related $10 million minimum royalty payment due to, Authentic for the brand through the first half of next year.

The third-quarter results offered no resolution of the company’s search for a buyer for the Lucky Brand division. “We are not prepared at this time to make comments on any process or decisions about Lucky Brand,” McComb said.

In the three months ended Sept. 28, the company reduced its net loss to $16.9 million, or 14 cents a diluted share, from a loss of $18.8 million, or 17 cents, in the 2012 period. Adjusted losses per share for continuing operations were 3 cents, deeper than the 1-cent loss expected, on average, by analysts. The year-ago adjusted loss was 5 cents a share.

Revenues essentially matched analysts’ estimates, rising 18.1 percent to $430.6 million from $364.6 million. Kate Spade expanded 76.4 percent, to $179.7 million, as its comparable sales from stores and e-commerce grew 31 percent. Lucky’s sales were up 7.2 percent, to $120 million, on a flat comp performance.

Gross margin improved to 56.5 percent of sales from 55.7 percent a year ago.

In the nine months, Fifth & Pacific’s net loss dropped to $112.2 million, or 93 cents, from $131.5 million, or $1.22. Revenues were up 16.3 percent, to $1.18 billion from $1.01 billion.

McComb said in a conference call to Wall Street analysts that product trends in Kate Spade include “very strong growth in small leather goods and in handbags.” Apparel continues to be the strongest category at Kate Spade Saturday, which skews to a younger consumer profile that is also “more likely to come back and shop more often.”

He said on the call, “With respect to the Juicy store fleet, we anticipate converting a number of Juicy stores to Lucky Brand and Kate Spade New York.”

Shares of Fifth & Pacific Thursday rose 4.2 percent to close at $28.89 in trading on the New York Stock Exchange.

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