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Liz Claiborne Closing 54 Stores

Apparel Retailer Exiting Sigrid Olsen Brand
January 10, 2008
New York-based Liz Claiborne, Inc (NYSE:LIZ), operator of approximately more than 450 stores in the women's and men's apparel and accessories categories, this week announced plans coming from its strategic review process of 16 non-core brands, which initiated last summer.

The retailer is discontinuing its Sigrid Olsen brand, which will result in the closure of its 54 Sigrid Olsen stores. In a statement, the company said "the Sigrid brand has been experiencing losses over the past several years." According to CoStar Tenant, the average Sigrid Olsen store is 2,000 square feet.

Claiborne does plan to re-open some of the best Sigrid locations as stores for its direct brands, which include Juicy Couture, Kate Spade, Lucky Brand and Mexx. Also last summer, the retailer announced plans to open 300 new stores under these brands through 2010.

Other results of the review include Liz Claiborne selling its Laundry By Design and C&C California Brands to Perry Ellis International for $37 million; that deal is scheduled to close by the end of this quarter. The company had one Laundry by Design store opening in New York City. In October, the company completed the sale of brands Emma James, Intuitions, JH Collectibles and Tapemeasure to Li & Fung, a Hong Kong-based consumer goods buying agency, for an undisclosed amount.

Liz Claiborne has five brands remaining in its portfolio that are still undergoing the strategic review process: Dana Buchman, Ellen Tracy, Kensie, Mac & Jac, and prAna. The brands are primarily wholesale brands, but the company does operate two Dana Buchman stores.

The company's third quarter report included 3.9% decline in net sales and a significant decrease in earnings per share, but it was ahead of schedule in its cost reduction initiatives and strategic review process. In the report, Liz Claiborne said the aggressive store opening plan stands, but also said, the "outlook we provided in July did not assume a robust economy, but it also did not assume the challenging macroeconomic environment we are now facing. Economic uncertainty, warm weather and low levels of mall traffic have all contributed to weak sales for retailers during 2007." William McComb, CEO added in a statement, "There's no question the macroeconomic headwinds will pose ongoing pressure during our turnaround, and to the retail industry at large."

This article appears in "CoStar's Retail News Roundup: Jan. 13 to 19, 2008," a weekly feature written by CoStar News Senior Editor Sasha M. Pardy. In this issue, CoStar reports on expansions and new concepts at Wal-Mart, CiCi's Pizza and Circuit City; new retail developments in TN, CO, NC and NJ; acquisition, merger, or sale activity at De Rito, PF Chang's and Tiger Direct; store closings at Liz Claiborne, Starbucks, Ethan Allen, Rent-A-Center and PacSun; sustainability analysis by ICSC; personnel announcements at Related Cos and Westfield, Equity One, Hanley, Target, and NRDC.

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