CLAIBORNE COMBINES 3 BRANDS INTO ONE UNIT
Byline: Anne D’Innocenzio
NEW YORK — Liz Claiborne said Wednesday it has consolidated its three moderate-price brands — Russ, Villager and Crazy Horse — into one unit. Each had been a separate division.
The consolidation is an effort to improve efficiency and profitability as well as increase responsiveness to the customer, according to Paul Charron, vice chairman and chief operating officer of Claiborne.
“We have been reviewing our moderate business over the last few months and realize that we can better optimize our results by focusing our efforts under one, rather than three, management teams,” said Charron, who joined Claiborne in May from VF Corp., where he was executive vice president. “We want to refine these labels and position them as part of a portfolio. This is not rocket science. This is simple, straightforward business.”
Such cha-nges, he said, will save the firm about $1 million in operating and personnel expenses, though the real benefit “is enhancing synergies.”
With the consolidation, Charron said, the company is close to hiring an executive who will be president of the moderate division, a new post. This new hiree, who is expected to come on board within the next month or so, will report to Charron.
Additionally, Ronald Mangini, who was president of the Russ division, has been named senior vice president of sales and marketing for all the moderate brands.
Sarah Levine, who was director of merchandising for the Russ division, becomes director of merchandise for the moderate brands. Charron said the company is expected to name a vice president of product development for the brands on Friday.
Larry Burak continues as vice president of manufacturing for all moderate brands, reporting to Jack Listanowsky, executive vice president, manufacturing and operations for the firm; and Frank Peticca, divisional controller for all moderate brands, will continue to report to Samuel Miller, chief financial officer of Claiborne.
Charron added that about 25 positions across the board in the moderate division were eliminated Wednesday. He added, however, that many of those whose jobs were eliminated are being reassigned to other areas of the firm. It could not be learned how many employees work in the three moderate divisions.
Charron noted that the moderate business has had “mixed results,” but he said that there is “room for opportunity.” The three brands were acquired in 1992 from Russ Togs, which was liquidating in bankruptcy.
“There are no negatives to these labels,” said Charron, who said the firm has done consumer studies on the brands.
The three labels generated sales of $78.7 million in 1993, which was $20 million short of what Wall Street was expecting. Charron said the division is expected to generate about $100 million for 1994.
Charron pointed out that the restructuring will enable the firm to fine-tune the labels, though he emphasized that there is not going to be a change in distribution.
“We are not going into mass but are strictly focusing on the department store distribution,” he said. Currently, Villager is priced lower than Russ and Crazy Horse.
Crazy Horse is denim-driven, while Russ is a more traditional moderate brand, Charron said.
“We don’t want any overlapping, but we are working on repositioning them so they target different market needs,” he said, declining to elaborate. “Before, we were operating in a vacuum. Now, we will operate as part of a portfolio.”
The restructuring move was applauded by at least two industry observers.
The moderate division has in the past had disappointing results, and I think this will mark the beginning of improved fortune for Liz Claiborne,” said Lawrence C. Leeds Jr., managing director of Buckingham Research.
“I see this as definitely a positive sign,” said Andrew Jassin, partner at Marketing Management Group, but added, “I am not so sure that the brands carry cachet any more.”