NEW YORK, Nov. 2, 2011 /PRNewswire/ -- Liz Claiborne, Inc.
(NYSE: LIZ) today announced that it has completed the transaction
to sell domestic and international trademark rights of its Liz
Claiborne family of brands and domestic trademark rights of its
Monet brand to J. C. Penney Company, Inc. Total cash proceeds of
$288 million include an advance of
$20 million in exchange for the
Company's agreement to develop exclusive brands for J. C. Penney.
Mr. William McComb, Chief
Executive Officer of Liz Claiborne, Inc., said: "We are very proud
of the value we have unlocked from our Partnered Brands group. What
remains of that segment is a private brand jewelry design and
development group that will continue to serve J. C. Penney, via our exclusive license for the
Liz Claiborne and Monet brand jewelry lines. It will also continue
to market Trifari and Marvella, as well as serve Kohl's with a
license for Dana Buchman
jewelry. Our jewelry capability is a profitable niche that
was worth retaining, and will add to our earnings profile."
Mr. McComb continued: "With this announcement, the company has
completed the last in a series of five transactions that in total
have raised $471 million, allowing
the company to meaningfully de-leverage and transform its balance
sheet--while creating a portfolio focused on growth."
Mr. McComb concluded: "We have eliminated significant operating
and financial risk and complexity. As we generate our strongest
cash flow in the November/December time period, we are reaffirming
our expected year-end 2011 net debt to be between $270 and $290 million. We are now focused on our
three global lifestyle brands -- Juicy Couture, kate spade and
Lucky Brand--and seeing the high growth and high margin
opportunities they offer come to fruition as well."
About Liz Claiborne, Inc.
Liz Claiborne Inc. designs and markets a portfolio of
retail-based, premium, global lifestyle brands including Juicy
Couture, kate spade, and Lucky Brand. In addition, a private brand
jewelry design and development group will continue to market brands
through department stores as well as serve J. C. Penney via an exclusive license for Liz
Claiborne and Monet jewelry lines and Kohl's with a license for
Dana Buchman jewelry. The Company
also has licenses for the Liz Claiborne New York brand which is
available at QVC; Lizwear, which is distributed through the Club
Store channel, and the DKNY® Jeans and DKNY® Active brands. Liz
Claiborne Inc. maintains an 18.75% stake in Mexx, a European
apparel and accessories retail-based brand. Visit
www.lizclaiborneinc.com for more information.
Liz Claiborne, Inc. Forward-Looking Statement
Statements contained herein that relate to the Company's future
performance, financial condition, liquidity or business or any
future event or action are forward-looking statements under the
Private Securities Litigation Reform Act of 1995. Such statements
are indicated by words or phrases such as "intend," "anticipate,"
"plan," "estimate," "target," "forecast," "project," "expect,"
"believe," "we are optimistic that we can," "current visibility
indicates that we forecast" or "currently envisions" and similar
phrases. Such statements are based on current expectations only,
are not guarantees of future performance, and are subject to
certain risks, uncertainties and assumptions. The Company may
change its intentions, belief or expectations at any time and
without notice, based upon any change in the Company's assumptions
or otherwise. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated,
estimated or projected. In addition, some risks and uncertainties
involve factors beyond the Company's control. Among the risks and
uncertainties are the following: our ability to continue to have
the necessary liquidity, through cash flows from operations, and
availability under our amended and restated revolving credit
facility may be adversely impacted by a number of factors,
including the level of our operating cash flows, our ability to
maintain established levels of availability under, and to comply
with the financial and other covenants included in, our amended and
restated revolving credit facility and the borrowing base
requirement in our amended and restated revolving credit facility
that limits the amount of borrowings we may make based on a formula
of, among other things, eligible accounts receivable and inventory
and the minimum availability covenant in our amended and restated
revolving credit facility that requires us to maintain availability
in excess of an agreed upon level; general economic conditions in
the United States, Europe and other parts of the world, including
the impact of debt reduction efforts in the United States; levels of consumer
confidence, consumer spending and purchases of discretionary items,
including fashion apparel and related products, such as ours;
restrictions in the credit and capital markets, which would impair
our ability to access additional sources of liquidity, if needed;
changes in the cost of raw materials, labor, advertising and
transportation, which could impact prices of our products; our
dependence on a limited number of large US department store
customers, and the risk of consolidations, restructurings,
bankruptcies and other ownership changes in the retail industry and
financial difficulties at our larger department store customers;
our ability to successfully implement our long-term strategic
plans; risks associated with the transition of the Mexx business to
the joint venture in which we hold a minority interest and the
possible failure of the Mexx joint venture that may make our
interest in the joint venture of little or no value and risks
associated with the ability of the controlling JV partner to
operate the Mexx business successfully which will impact the
potential value of our minority interest; costs associated with (i)
the transition of the Liz Claiborne family of brands, Monet,
Dana Buchman, Kensie and Mac &
Jac brands from the Company to their respective acquirers and (ii)
the early termination and transition of the DKNY® Jeans and DKNY®
Active Licenses may negatively impact our business, financial
condition, results of operations, cash flows and liquidity; our
ability to sustain recent performance in connection with the
re-launch of our Lucky Brand product offering and our ability to
revitalize our Juicy Couture creative direction and product
offering; our ability to anticipate and respond to constantly
changing consumer demands and tastes and fashion trends, across
multiple brands, product lines, shopping channels and geographies;
our ability to attract and retain talented, highly qualified
executives, and maintain satisfactory relationships with our
employees; our ability to adequately establish, defend and protect
our trademarks and other proprietary rights; our ability to
successfully develop or acquire new product lines or enter new
markets or product categories, and risks related to such new lines,
markets or categories; risks associated with the sale of assets to
J. C. Penney described above and the
licensing arrangement with QVC, Inc., including, without
limitation, our ability to continue a good working relationship
with these parties and possible changes or disputes in our other
brand relationships or relationships with other retailers and
existing licensees as a result; the impact of the highly
competitive nature of the markets within which we operate, both
within the US and abroad; our reliance on independent foreign
manufacturers, including the risk of their failure to comply with
safety standards or our policies regarding labor practices; risks
associated with our buying/sourcing agent agreements with
Li & Fung Limited, which results in a single foreign
buying/sourcing agent for a significant portion of our products;
risks associated with our US distribution services agreement with
Li & Fung, which results in a single third party service
provider for a significant portion of our US distribution and our
ability to effectively transition our distribution function to Li
& Fung; a variety of legal, regulatory, political and economic
risks, including risks related to the importation and exportation
of product, tariffs and other trade barriers, to which our
international operations are subject; our ability to adapt to and
compete effectively in the current quota environment in which
general quota has expired on apparel products, but political
activity seeking to re-impose quota has been initiated or
threatened; our exposure to foreign currency fluctuations; risks
associated with material disruptions in our information technology
systems; risks associated with privacy breaches; risks associated
with our plans to substantially grow our business in Asia through Kate
Spade's joint venture with E-Land Fashion China Holdings,
Limited and Kate Spade's
reacquisition of certain distribution rights in (i) the
People's Republic of China via
such joint venture and (ii) certain Southeast Asian
territories; limitations on our ability to utilize all or a portion
of our US deferred tax assets if we experience an "ownership
change"; the outcome of current and future litigations and other
proceedings in which we are involved; and such other factors as are
set forth in the Company's 2010 Annual Report on Form 10-K and
the Company's Quarterly Reports on Form 10-Q for the quarters
ending April 2, 2011 and July 2, 2011, each filed with
the Securities and Exchange Commission, including in the section in
each report entitled "Item 1A-Risk Factors". The Company
undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.
SOURCE Liz Claiborne, Inc.
