Byline: Thomas J. Ryan

NEW YORK — Liz Claiborne Inc.’s better women’s sportswear in 1996 chalked up its first annual sales gain since 1992, thanks to growth in casual labels and special sizes, but the star of the Claiborne show last year, as far as sales gains are concerned, was the Dana Buchman bridge business.
The sales breakdown by product category is given in the firm’s just-released 10K covering 1996 results. Overall, as reported, Claiborne — which has been in turnaround mode for several seasons — turned in a solid performance in 1996. Profits climbed 22.7 percent to $155.7 million, or $2.15 a share, and sales gained 6.5 percent to $2.21 billion.
In addition to the big sales gains in the Dana Buchman unit, the 10K cited sales increases in outlet stores and men’s wear. On the downside, accessories, dresses and suits, and moderate sportswear all registered sales declines.
Sales of better women’s sportswear grew 10.8 percent to $1.23 billion from $1.1 billion. The group consists of casual sportswear, including Lizsport, Lizwear and Liz & Co.; special-size sportswear, primarily under Elisabeth and Liz & Co., and Collection and Studio career wear.
Casual sportswear’s sales rose 9.3 percent to $607.6 million as a result of higher unit volume and higher unit selling prices. Special size sportswear sales climbed 19 percent to $410.3 million, reflecting a new Liz & Co. petite line and, to a lesser extent, inventory needed for 10 new Elisabeth stores.
Studio and Collection sales inched up 1.3 percent to $209.7 million as the inclusion of the expanded Studio line offset a 12 percent decline in sales of misses’ Collection.
Dana Buchman’s sales jumped 38.5 percent to $188.7 million, with about 45 percent of the increase stemming from introduction of the Dana B. & Karen lines in February 1996. Men’s sportswear and furnishings’ sales gained 7.5 percent to $121.6 million due to higher unit volume.
Outlet store sales advanced 25 percent to $193.8 million, reflecting improved store productivity and new store openings. There were 82 outlet stores at yearend versus 72 at the start.
Sales at its full-price retail specialty stores inched up 2.4 percent to $199.7 million. The group has been repositioning since Claiborne’s decision in late 1994 to convert its First Issue locations to other formats. As of March 1, Claiborne’s 112 specialty stores in the U.S. consisted of 49 Liz Claiborne, 56 Elisabeth, 6 Claiborne men’s and one Dana Buchman store.
Meanwhile, sales of dresses and suits fell 14.4 percent to $105.3 million as a result of lower unit volume and lower average unit selling prices caused by slack demand.
Sales in the special markets/moderate group dropped 16.9 percent to $105.3 million. The group includes the Emma James and Villager separates lines sold to department stores, the First Issue career line sold exclusively to Sears, and the Russ separates line sold to Wal-Mart and other mass merchandisers. The Crazy Horse line was suspended in December 1996.
The Emma James separates line was first shipped in January 1997 and the repositioned First Issue career line was first shipped to Sears in November 1996. The Russ line was first shipped to Wal-Mart in January 1997.
Sales of accessories and other nonapparel categories slid 10 percent to $297.5 million. The group includes handbags, hats, leather goods, jewelry and cosmetics.
Claiborne noted that its cosmetics division’s sales last year increased $13 million, reflecting $40 million in sales of the new Curve for Women and Curve for Men fragrances, initially shipped in July 1996, partially offset by declines in other fragrances. The report does not break out a figure for overall volume in fragrance.
On the profit side, Claiborne’s margins last year moved up to 39.5 percent of sales from 38 percent. The firm attributed half of the margin gain to the lowering in January 1996 of the trade discount it provides to customers from 10 percent to 8 percent, which is the standard in the industry.
Margins were also helped by an improved air/vessel ratio in shipments, significantly higher margins in its outlet business and the greater proportion of sales of Dana Buchman and cosmetics, both of which carry higher margins than the rest of Claiborne’s products.
These gains helped offset lower margins in dresses and moderate sportswear and at its full-price specialty stores.
Claiborne is using the funds saved by the lowering of the trade discount for its national advertising campaign and for programs designed to improve Claiborne’s performance on the selling floor.
Advertising costs amounted to $23 million last year, and Claiborne plans to spend about $31 million in 1997. It spent $4 million in 1995 in national advertising. Claiborne also incurred costs under the cooperative advertising programs with department stores of approximately $50 million in 1996, up from $39 million in 1995.
By the end of 1996, 176 in-store shops in 97 stores, amounting to about 200,000 square feet, were in place under the firm’s LizView program for such shops. Claiborne said it has requests for more than 500 additional LizView installations and expects approximately 400 installations to be open this year. LizView was introduced in March 1996.
Claiborne said its LizEdge program for in-store servicing will be expanded to accessories and jewelry this year and will integrate Liz & Learn, a training and motivational program for customer sales associates. The LizEdge program was introduced in January 1996 to drive multiple-item, regular-price sales.
Claiborne’s 10K also noted:
May Department Stores was Claiborne’s largest customer, accounting for 18 percent of sales, followed by Federated Department Stores, 17 percent, and Dillard’s Department Stores, 11 percent.
As of Feb. 28, Claiborne’s order backlog stood at $690 million, up from $536 million a year ago.
Sales domestically grew 7.7 percent to $2.1 billion, but slipped 9.4 percent to $125.2 million internationally.
Capital expenditures are expected to total $70 million this year, primarily to expand its distribution facilities and renovate its New York showrooms and offices. It also includes about $17 million to upgrade its information systems. The company said it recently completed the planning stages of a significant information systems upgrade project and expects to spend approximately $45 million to $60 million over the next three years to fully implement the program.
Claiborne’s employee count was pruned to 7,100 as of Dec. 28 from 7,400 a year earlier.

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