Once the biggest the name in women’s fashion, Liz Claiborne had recently fallen from great heights.Last year, needing to pay more than $500 million of debt, the company sold to department store chain JC Penney several of its brands and among them, the Liz Claiborne brand itself.
It was in 2006 that the company made a decision that contributed largely to its recent downfall when it decided to make clothes for JC Penney, including ranges of exclusive clothing line.
Learn by this brand’s mistakes
The deal strained Claiborne’s relations with is primary and longtime retail partner, Macy’s, whose main competitor was JC Penney. Macy’s drastically reduced orders in 2007, severely reducing Claiborne’s earnings. And for the first time the company failed to make a profit with an annual loss of $372 million.
While in the same year company founder Liz Claiborne passed away. She had already stepped down from any formal business since the late 1980s, but her death happened along the same period when the company’s fortunes were turning for the worse.
Credit Suisse dowgraded the company’s rating during the same year, while fashion designer Isaac Mizrahi was hired to reinvent its clothing.
Mizrahi’s work flopped in 2009, and the company was losing money. It had lost almost 90% of its stock value, and posted a loss of $1.6 billion fron 2007-2009.
In 2010 rumors of bankruptcy began to surface, and along with a poor economy, the company made some massive cutbacks. It closed its remaining 87 outlet stores including its elegant flagship store on Fifth Avenue in Manhattan. By then the Liz Claiborne brand was mainly only to be found in JC Penney stores.
And in 2011 with the company losing money fast and drowning in debt it made the shocking announcement that it was selling its flagship Liz Claiborne brand.
Without its original Liz Claiborne brand, the company once the biggest name in women’s clothing and fashion, and which made the Fortune 500 company within ten years of its operation with annual sales of 1.2 billion during the 1980s, became a shadow of its former self; and this year it quietly became the Fifth & Pacific Company.