NEW YORK, Feb. 3 /PRNewswire-FirstCall/ -- Liz Claiborne Inc. (NYSE: LIZ) today announced that it is implementing additional cost reduction initiatives in response to the highly uncertain economic environment, including the elimination of approximately 725 positions or 8 percent of its U.S. workforce, the previously reported closing of its distribution center in Mt. Pocono, PA and the suspension of merit pay increases for all employees.
These actions are in addition to cost reduction initiatives previously announced. With the announcement today, since 2007 the company has closed six distribution centers, eliminated about 2,200 global staff positions, and streamlined its brand portfolio by selling, closing or licensing 14 of its brands.
Commenting on the announcement, William L. McComb, Chief Executive Officer of Liz Claiborne Inc., said: "The challenging retail and economic environment requires us to remain more focused than ever on cost rationalization and act decisively to manage the relationship between our revenue and our SG&A. As we strive to enhance our liquidity and prudently manage our business through this uncertain time, business leaders across our organization are continually reviewing all costs and determining where they can make an impact. Personnel decisions are always the hardest, especially in times like these. And while reducing head count is not the only cost cutting measure being implemented, it is certainly the most difficult."
Mr. McComb continued: "We also decided to close the Liz Claiborne distribution center in Mt. Pocono, Pennsylvania in order to better align our distribution capabilities with the current and future realities of the economy and our business. This, too, was a tough decision. Whether for a short time or a longer tenure, our sincere thanks go out to those who have worked so hard on behalf of Liz Claiborne Inc."
The job eliminations span all levels of the company and are scheduled to be completed by the end of the first quarter of 2009. Eligible associates will be offered appropriate severance packages and outplacement services.
Additional details on the cost savings and charges associated with these actions will be provided on the company's earnings call in early March.
About Liz Claiborne Inc.
Liz Claiborne Inc. designs and markets a global portfolio of retail-based premium brands including Kate Spade, Juicy Couture, Lucky Brand and Mexx. The Company also has a refined group of department store-based brands with strong consumer franchises including the Liz Claiborne and Monet families of brands, Kensie, Kensiegirl, Mac & Jac, and the licensed DKNY Jeans Group. For more information visit www.lizclaiborneinc.com.
Forward-Looking Statements
Statements contained herein that relate to future events or the Company's future performance are forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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 factors are beyond the Company's control. Among the factors that could cause actual results to materially differ include: risks associated with the current economic conditions, including the tightening of the credit markets, reduction in consumer confidence and discretionary spending, continued recessionary pressures in the United States, Europe and other parts of the world, and continued lower levels of consumer traffic within department stores, malls and other shopping and selling environments; the Company's ability to continue to have access on favorable terms to sufficient sources of liquidity necessary to fund ongoing cash requirements, which access may be adversely impacted by a number of factors, including the reduced availability of credit generally, including the recent increase in the cost of capital, the level of the Company's cash flows, which will be impacted by the level of consumer spending and retailer and consumer acceptance of its products, further adverse changes in the Company's credit ratings, the Company's ability to comply with the financial covenants (as amended) included in its debt and credit facilities, and interest rate and exchange rate fluctuations; risks relating to possible further impairment of goodwill or other long-lived assets that could result from a number of factors, including downward pressure on the company's market capitalization; risks related to the reorganization of the Company and the realignment of the Company's management structure; risks associated with the Company's ability to attract and retain talented, highly qualified executives and other key personnel and to provide for the succession of senior management; risks associated with the Company's efforts to reorganize its Mexx Europe operations; risks associated with the Company's ability to execute successfully on its long-term growth plans; risks associated with the Company's strategic review of brands completed in 2008; risks associated with the Company's operation of its specialty retail and outlet businesses, including the ability to successfully expand the specialty retail store base of its Direct Brands segment and to develop best-in-class retail capabilities; risks associated with the Company's ability to achieve greater collaboration with its wholesale customers; risks associated with the Company's ability to achieve projected cost savings; risks related to the Company's ability to successfully continue to evolve its supply chain system, including its product development, sourcing, logistics and technology functions, to, among other things, reduce product cycle-time and costs and meet customer demands and the requirements of the Company's specialty retail and outlet businesses; risks associated with selling the Company's Liz & Co. and Concepts by Claiborne brands outside of better department stores; risks associated with the Company's Liz Claiborne and Claiborne branded products association with known designers and retailer and consumer acceptance of the resulting products; risks associated with the Company's dependence on sales to a limited number of large United States department store customers; the impact of consolidation, restructurings and other ownership changes, and, financial difficulties, including bankruptcies, in the retail industry, including with respect to the Company's department store customers; the Company's ability to respond to constantly changing consumer demands and tastes and fashion trends, across multiple product lines, shopping channels and geographies; risks associated with the use of unaffiliated manufacturers, including the possible failure of the Company's unaffiliated manufacturers to manufacture and deliver products in a timely manner, to meet quality or safety standards or to comply with Company policies regarding labor practices or applicable laws or regulations; risks related to the Company's ability to adapt to and compete effectively in the current quota environment, including changes in sourcing patterns resulting from the elimination of quota on apparel products as well as lowered barriers to entry; risks associated with the Company's ability to maintain and enhance favorable brand recognition; risks associated with the Company's ability to correctly balance the level of its commitments with actual orders; risks associated with new business relationships and new product lines, product categories and markets, including risks relating to achieving projected or satisfactory levels of sales, profits and/or return on investment, and risks inherent in licensing arrangements, such as the Company's DKNY Jeans and DKNY Active license, fragrance license with Elizabeth Arden, and Dana Buchman license with Kohl's Corporation; risks associated with any significant disruptions in the Company's relationship with its employees or with its relationship with the unions which represent certain Company employees; risks associated with changes in social, political, economic, legal and other conditions affecting foreign operations, sourcing or international trade, including the impact of foreign currency exchange rates, and currency devaluations in countries in which the Company sources product and risks associated with the importation and exportation of product; risks associated with war, the threat of war and terrorist activities; work stoppages or slowdowns by suppliers or service providers; risks relating to protecting and managing the Company's intellectual property rights; and such other economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services and prices and such other factors as are set forth in the Company's Quarterly Report on Form 10-Q for the quarter ended October 4, 2008, including under the sections captioned "Item 1A. Risk Factors" and "Statements Regarding Forward-looking Statements", and in the Company's 2007 Annual Report on Form 10-K. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE Liz Claiborne Inc.
