Liz Claiborne Case StudyKathleen Harding-Heber Lisa Carbonneau

Melanie Israel Jessica Johnston

Liz Claiborne FactsLiz Claiborne Facts Founded in 1976 Founded in 1976

Established by Liz Claiborne, Art Ortenberg, Established by Liz Claiborne, Art Ortenberg, Leonard Boxer and Jerome ChazenLeonard Boxer and Jerome Chazen

Designing and marketing women’s Designing and marketing women’s sportswearsportswear

Liz Claiborne Collection, Lizsport, & LizwearLiz Claiborne Collection, Lizsport, & Lizwear Liz Claiborne Inc. went public in 1981 Liz Claiborne Inc. went public in 1981

with net sales of $116.8 million. with net sales of $116.8 million. By 1982 added petite sportswear and By 1982 added petite sportswear and

dress line, women’s shoes and dress line, women’s shoes and fashion accessoriesfashion accessories

In 1985 with retail sales surpassing In 1985 with retail sales surpassing 1.2 billion, was the first company 1.2 billion, was the first company started by a woman to make the started by a woman to make the fortune 500fortune 500

By 1987 added men’s sportswear, By 1987 added men’s sportswear, men’s furnishings, petite dresses, & men’s furnishings, petite dresses, & fragrancesfragrances

In 1989 both Liz Claiborne and Art In 1989 both Liz Claiborne and Art Ortenberg retiresOrtenberg retires

Liz Claiborne FactsLiz Claiborne Facts In 1992 Liz Claiborne Inc. acquires In 1992 Liz Claiborne Inc. acquires

Crazy Horse, Russ, & the VillagerCrazy Horse, Russ, & the Villager 1993 opens retail stores1993 opens retail stores

16 Liz Claiborne retail store16 Liz Claiborne retail store 39 First Issue stores39 First Issue stores 55 outlet stores55 outlet stores

In 2000, net sales of $3.1 billionIn 2000, net sales of $3.1 billion Claims 2% of the women’s apparel Claims 2% of the women’s apparel

marketmarket Sold in major department and Sold in major department and

specialty storesspecialty stores Consists of women’s & men’s Consists of women’s & men’s

fashion apparel and accessoriesfashion apparel and accessories Liz Claiborne Inc. employs over Liz Claiborne Inc. employs over

7,000 people worldwide7,000 people worldwide Executive offices, design, sales, Executive offices, design, sales,

marketing and merchandising in marketing and merchandising in New York CityNew York City

Production, administration, Production, administration, distribution and finance in New distribution and finance in New JerseyJersey

Financial HighlightsFinancial Highlights

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DivisionsDivisions

Liz Claiborne Inc

Wholesale Apparel Wholesale Non-Apparel Retail

InternationalDomestic

Liz Claiborne BrandsLiz Claiborne BrandsAxcessAxcessBora BoraBora BoraCandie'sCandie'sClaiborneClaiborneCrazy HorseCrazy HorseCurveCurveDana BuchmanDana BuchmanEllen TracyEllen TracyElisabethElisabethEmma JamesEmma JamesFirst IssueFirst IssueJ.H. CollectiblesJ.H. CollectiblesJuicy CoutureJuicy Couture

•In addition, Liz Claiborne Inc. holds the exclusive, long-term license to produce and sell men's and women's collections of DKNY® Jeans and DKNY® Active

•The Company also has the exclusive license to produce women's wear under the Kenneth Cole New York and Reaction Kenneth Cole brand names.

Laundry by Laundry by Shelli SegalShelli SegalLiz ClaiborneLiz ClaiborneLucky BrandLucky BrandMamboMamboMarvellaMarvellaMexx Mexx Monet Monet Monet 2 Monet 2 Realities Realities Sigrid Olsen Sigrid Olsen Trifari Trifari Villager Villager

Liz Claiborne Brand vs Other Liz Claiborne Brand vs Other Product Product Percent of SalesPercent of Sales

OtherBrands

LizClaiborne

1997 2002

70% 43%

Liz Claiborne Current Liz Claiborne Current PositioningPositioning

Stock Quote $34.67 (as of Stock Quote $34.67 (as of 6/12/03) 6/12/03)

105,592,062 shares 105,592,062 shares outstanding (as of 12/31/02)outstanding (as of 12/31/02)

Company was founded in Company was founded in 1976 & went public on June 1976 & went public on June 1, 1981 at an adjusted price 1, 1981 at an adjusted price of $1.19 per share. of $1.19 per share. (adjusted for stock splits).(adjusted for stock splits).

CEO Paul Charron CEO Paul Charron anticipated growth for 2003 anticipated growth for 2003 = 9-11% increase in sales= 9-11% increase in sales

LIZ is currently tracking to LIZ is currently tracking to exceed this prediction, with exceed this prediction, with a 1st quarter reported a 1st quarter reported 20.5% sales increase)20.5% sales increase)

Liz Claiborne Product LinesLiz Claiborne Product Lines AxcessAxcess – modern women’s & men’s clothing – modern women’s & men’s clothing Bora BoraBora Bora – modern cosmetics and fragrances – modern cosmetics and fragrances Candie’s Candie’s – modern cosmetics & fragrances– modern cosmetics & fragrances ClaiborneClaiborne- classic men’s & children’s clothing, accessories, and - classic men’s & children’s clothing, accessories, and

cosmetics & fragrancescosmetics & fragrances Crazy HorseCrazy Horse- classic women’s & men’s clothing & accessories- classic women’s & men’s clothing & accessories City DKNYCity DKNY- modern women’s clothing- modern women’s clothing CurveCurve- modern cosmetics & fragrances- modern cosmetics & fragrances Dana BuchmanDana Buchman- classic women’s clothing- classic women’s clothing DKNY Active/DKNY JeansDKNY Active/DKNY Jeans – denim women’s & men’s clothing – denim women’s & men’s clothing Elisabeth by Liz ClaiborneElisabeth by Liz Claiborne – classic larger sized women’s – classic larger sized women’s

clothing & accessoriesclothing & accessories Ellen TraceyEllen Tracey – classic women’s apparel, accessories, cosmetics – classic women’s apparel, accessories, cosmetics

& fragrances& fragrances Emma JamesEmma James – classic women’s apparel – classic women’s apparel First IssueFirst Issue – classic women’s apparel & accessories – classic women’s apparel & accessories J.H. CollectiblesJ.H. Collectibles – relaxed women’s apparel – relaxed women’s apparel

Liz Claiborne Product LinesLiz Claiborne Product Lines Juicy CoutureJuicy Couture – sexy, luxurious, fun – baby apparel, down dog – sexy, luxurious, fun – baby apparel, down dog

couture yoga, men’s apparel, sleepwear, swim, maternity, outer-couture yoga, men’s apparel, sleepwear, swim, maternity, outer-ware, denim, & accessories.ware, denim, & accessories.

Kenneth Cole, New YorkKenneth Cole, New York – modern women’s clothing & – modern women’s clothing & accessoriesaccessories

LaundryLaundry – modern women’s clothing – modern women’s clothing Liz ClaiborneLiz Claiborne- classic women’s & children’s clothing, - classic women’s & children’s clothing,

accessories, cosmetics & fragrances.accessories, cosmetics & fragrances. Lucky BrandLucky Brand – denim women’s, men’s, and children’s clothing, – denim women’s, men’s, and children’s clothing,

accessories, cosmetics & fragrances.accessories, cosmetics & fragrances. MamboMambo- modern cosmetics & fragrances- modern cosmetics & fragrances MarvellaMarvella – classic accessories – classic accessories MEXXMEXX – modern women’s, men’s, and children’s clothing, – modern women’s, men’s, and children’s clothing,

accessories, cosmetics & fragrances.accessories, cosmetics & fragrances. MonetMonet – classic accessories – classic accessories Monet 2Monet 2 – classic accessories – classic accessories RealitiesRealities – classic cosmetics & fragrances – classic cosmetics & fragrances Sigrid OlsenSigrid Olsen – relaxed women’s clothing & accessories – relaxed women’s clothing & accessories TrifariTrifari – classic accessories – classic accessories VillagerVillager – classic women’s clothing & accessories – classic women’s clothing & accessories

Some of Liz Claiborne’s Some of Liz Claiborne’s CompetitorsCompetitors

Bernard Chaus, Inc.Bernard Chaus, Inc. (including Josephine Chaus) – (including Josephine Chaus) – featuring women’s career clothing. featuring women’s career clothing.

Company was started in 1976, and reported $149.5 million in sales Company was started in 1976, and reported $149.5 million in sales in 2001. in 2001.

Brands all include the Josehine Chaus name: Brands all include the Josehine Chaus name: Josephine Chaus Collection – career sportswearJosephine Chaus Collection – career sportswear Josephine Chaus Sport – casual sportswearJosephine Chaus Sport – casual sportswear Josephine Chaus Studio- business casual clothingJosephine Chaus Studio- business casual clothing Josephine Chaus Essentials – better career separatesJosephine Chaus Essentials – better career separates

Constantly growing & expanding into new markets & expanding Constantly growing & expanding into new markets & expanding product lines product lines recent introduction of Chaus & Co. in 350 JCPenney storesrecent introduction of Chaus & Co. in 350 JCPenney stores

Constant production & technology improvements – resulting in a Constant production & technology improvements – resulting in a recent 10% decrease in annual operating expenses.recent 10% decrease in annual operating expenses. *Stock performance - $.98 per share (as of 7/3/03) *Stock performance - $.98 per share (as of 7/3/03) $1.01 52-week high - $.46 52-week low$1.01 52-week high - $.46 52-week low27,322,000 outstanding shares as of 5/9/0327,322,000 outstanding shares as of 5/9/03

Liz Claiborne’s CompetitorsLiz Claiborne’s Competitors

Ann Taylor Ann Taylor featuring “a look for every featuring “a look for every

occasion”, specializing in occasion”, specializing in women’s career clothing with women’s career clothing with a “design conscious” appeal a “design conscious” appeal with “relaxed lifestyle at with “relaxed lifestyle at work and at home”work and at home”

Brands include two divisions Brands include two divisions & over 580 stores:& over 580 stores:

Ann Taylor Ann Taylor Ann Taylor LoftAnn Taylor Loft

Stock performance - $29.62 Stock performance - $29.62 per share (as of 7/7/03)per share (as of 7/7/03)$17.05 52-week low$17.05 52-week low$30.07 52-week high$30.07 52-week high556,800 outstanding shares 556,800 outstanding shares as of 7/7/03as of 7/7/03

Liz Claiborne’s CompetitorsLiz Claiborne’s Competitors

VF CorporationVF Corporation boasts their 102 year history and reputation as the boasts their 102 year history and reputation as the

“world’s largest apparel industry – carrying: denim, “world’s largest apparel industry – carrying: denim, intimate apparel, knitwear, & specialty apparelintimate apparel, knitwear, & specialty apparel

One out of every 4 pairs of jeans sold in the U.S. is a One out of every 4 pairs of jeans sold in the U.S. is a VF brand.” VF brand.”

*VF boasts its’ positioning as having more than 25% *VF boasts its’ positioning as having more than 25% of the U.S. jeans market.of the U.S. jeans market.

Brands include: Brands include:

LeeLeeWranglerWranglerRustlerRustlerRidersRidersBritanniaBritannia

JansportJansportEastpackEastpackNorth FaceNorth FaceHealthtexHealthtexRed KapRed Kap

Vanity FairVanity FairVassarette Vassarette BestformBestformLily of FranceLily of FranceLouLouBoleroBolero

GemmaGemmaIntimaIntimaCherryCherryNatoriNatoriVarianceVariance

ChicChicGitanoGitanoMaverickMaverickOld AxeOld Axe

Liz Claiborne’s CompetitorsLiz Claiborne’s Competitors

Jones New YorkJones New York Jones Apparel Group, Inc. claims its position as a Jones Apparel Group, Inc. claims its position as a

“leader in the apparel and footwear industries”“leader in the apparel and footwear industries” Product lines including: sportswear, denim, suits, Product lines including: sportswear, denim, suits,

dresses, menswear, shoes, accessories, and costume dresses, menswear, shoes, accessories, and costume jewelryjewelry

Stock Performance: $30.50 stock price as of 7/6/03Stock Performance: $30.50 stock price as of 7/6/0338.25 52-week high - $25.61 52-week low38.25 52-week high - $25.61 52-week low864,800 outstanding shares as of 7/6/03864,800 outstanding shares as of 7/6/03

Brands Include:Brands Include:Jones New YorkJones New YorkEvan PiconeEvan PiconeRena RowanRena RowanTodd OldhamTodd OldhamMcNaughtonMcNaughtonGloria VanderbiltGloria Vanderbilt

ErikaErikaEnergieEnergieCurrantsCurrantsNine WestNine WestEasy SpiritEasy Spirit

l.e.il.e.iEnzo AngioliniEnzo AngioliniNapierNapierJudith JackJudith JackJamie ScotJamie Scot

Licensed Brands Include:Licensed Brands Include:

Lauren BLauren BRalph LaurenRalph LaurenRalph by Ralph LaurenRalph by Ralph LaurenPolo Jeans CompanyPolo Jeans CompanyTommy Hilfiger costume Tommy Hilfiger costume jewelry jewelry Givenchy costume Givenchy costume jewelryjewelryEsprit footwear & Esprit footwear & accessoriesaccessories

Liz Claiborne’s Charitable Liz Claiborne’s Charitable ContributionsContributions

“ “Women’s Work”Women’s Work” Liz Claiborne is committed Liz Claiborne is committed

to the prevention to the prevention domestic violence.domestic violence.

Liz Claiborne appears to Liz Claiborne appears to be the only company in be the only company in their category that places their category that places emphasis on such a widely emphasis on such a widely supported cause.supported cause.

Educational programs on-Educational programs on-line to end relationship line to end relationship violence & teen dating violence & teen dating violence.violence.

Liz Claiborne’s Charitable Liz Claiborne’s Charitable ContributionsContributions

The Liz Claiborne FoundationThe Liz Claiborne Foundation ““Reaching out to the communities in which we work and live.”Reaching out to the communities in which we work and live.” Provides financial & volunteer assistance to various non-profit Provides financial & volunteer assistance to various non-profit

organizations (especially those that address “issues of organizations (especially those that address “issues of particular concern to women and their families”.)particular concern to women and their families”.)

Job training & micro-enterprise development for disadvantaged Job training & micro-enterprise development for disadvantaged womenwomen

Serving the “special needs of women who are HIV-positive or Serving the “special needs of women who are HIV-positive or who have AIDS”.who have AIDS”.

Educational & Developmental programs for “underserved Educational & Developmental programs for “underserved children”.children”.

Supporting artistic & cultural institutions that assist the Supporting artistic & cultural institutions that assist the community.community.

A wide-ranging matching gifts programA wide-ranging matching gifts program

Marketing PhilosophyMarketing Philosophy

““Simple, straight Simple, straight forward fashion forward fashion designed for designed for women who have women who have more important more important things to think things to think about than what to about than what to wear” wear”

Lane, Bilafer, Fandel, Gottfried, Hoffman Lane, Bilafer, Fandel, Gottfried, Hoffman

p.490p.490

Marketing Philosophy Marketing Philosophy Social EnvironmentSocial Environment

More than 50% of all women More than 50% of all women in the United States currently in the United States currently work outside the homework outside the home

Stay-at-home moms have Stay-at-home moms have become the exception while become the exception while the dual income family has the dual income family has become the norm. become the norm.

Women no longer have the Women no longer have the kind of leisure time to shop kind of leisure time to shop like they once had and they like they once had and they prefer to accomplish as much prefer to accomplish as much as possible in a single as possible in a single shopping excursionshopping excursion

Liz Claiborne, Inc. has designed Liz Claiborne, Inc. has designed marketed itself to these women marketed itself to these women with the concept of convenience with the concept of convenience in mind. in mind.

Marketing Philosophy Marketing Philosophy Social EnvironmentSocial Environment

Liz Claiborne Inc. designed mix-Liz Claiborne Inc. designed mix-and-match outfits to suit and-match outfits to suit individual needs individual needs

The shopping experience for the The shopping experience for the busy lifestyles of working womenbusy lifestyles of working women

Elisabeth” clothing line designed Elisabeth” clothing line designed for the forgotten woman: Over for the forgotten woman: Over 30% of adult women are 30% of adult women are overweightoverweight

Currently, the corporation has Currently, the corporation has product lines designed for plus product lines designed for plus sizes, petites, suits, sportswear, sizes, petites, suits, sportswear, dresses, accessories, fragrance, dresses, accessories, fragrance, and now even a men’s line. and now even a men’s line.

Liz Claiborne Inc.’s portfolio of Liz Claiborne Inc.’s portfolio of products is designed to meet the products is designed to meet the needs of various shapes, sizes, needs of various shapes, sizes, and lifestyles and it is that social and lifestyles and it is that social versatility that significantly helps versatility that significantly helps to keep the corporation so to keep the corporation so successful year after year. successful year after year.

Women’s WorkWomen’s WorkWomen’s Work: helping to fund and assist social welfare Women’s Work: helping to fund and assist social welfare

programsprograms A way to give something of value back to the people who A way to give something of value back to the people who

have made the company have made the company The program began as a series of community-based, The program began as a series of community-based,

public art projects designed to heighten the awareness of, public art projects designed to heighten the awareness of, and encourage positive social change on, issues of and encourage positive social change on, issues of particular concern to women and their familiesparticular concern to women and their families

Tackles issues such as domestic violence, homelessness, Tackles issues such as domestic violence, homelessness, AIDS, and work-family conflicts AIDS, and work-family conflicts In an effort to heighten the awareness of domestic violence, Liz In an effort to heighten the awareness of domestic violence, Liz

Claiborne Inc. funds public campaigns Claiborne Inc. funds public campaigns Billboards, posters, brochures, bus signs, public broadcasts, and Billboards, posters, brochures, bus signs, public broadcasts, and

service announcements service announcements 24-hour domestic violence hot line 24-hour domestic violence hot line

StrengthsStrengths Diversified BrandsDiversified Brands

30 Brand Portfolio30 Brand Portfolio Bridging Modern, Bridging Modern,

Better, and Popular Better, and Popular Priced Priced

Original Liz brand Original Liz brand strength strength 43% of total company 43% of total company

salessales

Positive Corporate Positive Corporate Environment Environment

Public Relations Public Relations ProgramProgram

WeaknessesWeaknesses Wrong Product & Too Much Wrong Product & Too Much

of itof it Clothing industry is seasonalClothing industry is seasonal Designs and production need Designs and production need

large lead timelarge lead time Retirement of Liz ClaiborneRetirement of Liz Claiborne Lack of brand recognition Lack of brand recognition

with social consciousnesswith social consciousness InternationalInternational

-Political environment-Political environment-Trade restrictions-Trade restrictions-Distribution -Distribution -Marketability of brand -Marketability of brand Name Name productproduct

Opportunities Opportunities & Strategic Alternatives& Strategic Alternatives

Utilize Liz Claiborne in AdvertisingUtilize Liz Claiborne in Advertising Like Liz Taylor markets her perfumeLike Liz Taylor markets her perfume Ma Boyle advertises Columbia SportswearMa Boyle advertises Columbia Sportswear

Further publicize their Public Relations Further publicize their Public Relations ProgramProgram Domestic violence educational hang tagsDomestic violence educational hang tags

Extending Brands through licensingExtending Brands through licensing Expand popular priced branded linesExpand popular priced branded lines Expand Specialty StoresExpand Specialty Stores International DevelopmentInternational Development

Increase Distribution Centers OverseasIncrease Distribution Centers Overseas Continue to improve the supply chainContinue to improve the supply chain Market Expansion OpportunitiesMarket Expansion Opportunities License with Developed International LinesLicense with Developed International Lines

-MEXX-MEXX-Juicy Couture-Juicy Couture

Any Questions?Any Questions?