NORTH BERGEN, N.J. — Paul Charron, who joined Liz Claiborne Inc. as vice chairman and chief operating officer 10 years ago, said Thursday the company has “grown up,’’ as it has doubled in size, become three times more profitable and added more than 30 brands during his tenure.
Charron, appointed chief executive officer in 1995, reflected on the changes he has made in the apparel giant after the firm’s annual meeting at corporate headquarters here. Acknowledging economic and sourcing challenges in his speech to stockholders and corporate officers, Charron said he was more optimistic about the company’s prospects than when he came on board.
“Culturally, I think we’ve retained all the good things,” he said after the address. “I think we’ve just grown up.” Claiborne prides itself on a “culture of collaboration” and on having distinct design vision for each of its brands, Charron said.
Best known for the Liz Claiborne label, which brings in about 40 percent of its $4.24 billion in sales, the company markets a variety of brands from bridge to moderate prices, including Dana Buchman, Ellen Tracy, Lucky Brand, Axcess and Villager. Claiborne also operates almost 500 stores.
The company’s profits for 2003 were up 20.1 percent to $279.7 million, or $2.55 a diluted share, on a 14.1 percent rise in sales. The fourth quarter marked 32 consecutive quarters of sales increases. International, which accounts for more than 22 percent of sales, is an area of intense focus.
The company recognizes the need to adjust the signature Liz brand. Some retailers, such as Lord & Taylor, have moved away from it in a bid for more affluent customers. Charron said many of those stores were units that were the least profitable for the brand and that others in Claiborne’s portfolio have helped pick up the slack.
The Liz line was also consolidated from four subbrands into one master label, which is tailored somewhat differently for large accounts to provide differentiation on the sales floor. Stores are looking for specialized product, exclusive brands and private labels to give them an edge over the competition. At the same time, some stores will work more closely with key vendors like Liz, Charron said.
“Differentiation will continue to be a major thrust,” said Charron in his remarks. “One size or one brand or one approach will not fit all in the future we see.”
Claiborne acquired the Dutch firm Mexx in 2001 and is retooling it as a platform to grow brands such as Juicy Couture, Enyce, Ellen Tracy, Lucky and Liz in Europe. In addition to bringing Mexx to the U.S. market, the brand is helping Claiborne gain European know-how. Liz Claiborne Europe is being merged into the Mexx operation in Amsterdam later this year for greater efficiency and to help launch select U.S. brands in Europe.
“We’re the only [apparel] company that has moved aggressively via the acquisition route in Europe,” Charron said after the meeting.
There are three Mexx stores in New York, and plans for five more on the East Coast this year. The first Lucky Brand store in Europe is to open in Antwerp this fall. Claiborne has also grown by extending its brands into new categories through licensing, such as taking the Liz label into the home goods area and Juicy Couture into swimwear.
During the meeting, Charron said 2003 was a year when “the economy moved in fits and starts” and the fashion marketplace became more competitive. Still, Claiborne grew organically and through the acquisitions of Juicy Couture and Enyce.
Claiborne, which last year produced and transported 260 million units, is also preparing for the dropping of quotas on Jan. 1 by the 147 countries in the World Trade Organization.
While this will have an impact on manufacturing and logistics, Charron said overall, “This is a very good thing. It eliminates a cost of doing business that has added not one penny of value over the years.”