Liz Claiborne (LIZ) plans to exit its 87 Liz Claiborne branded outlet stores in the U.S. and Puerto Rico, the clothes maker announced Tuesday evening. The company has been in restructuring for some time now, and the decision came after a review, the company said.
As a result of this decision, the company expects the operating losses related to this business to be eliminated in early 2011 when the exit is anticipated to be completed. Liz's other outlet stores in the U.S. and Puerto Rico for its Juicy Couture, Lucky Brand, Kate Spade and Kensie brands are not impacted by this decision.
"With the launches of the Liz Claiborne brand at JCPenney and Liz Claiborne New York at QVC -- both next month -- we're announcing today that we will be exiting our 87 Liz Claiborne branded outlet stores in the United States and Puerto Rico, the majority of which will be exited in the coming months," said CEO William McComb.
McComb added that the concept of Liz Claiborne branded, was originally designed and leased to handle clearance for many brands in our portfolio, is "an outdated consumer proposition and one that no longer makes economic sense."
The company estimates that it will incur non-cash impairment charges of approximately $7.0 million in the second quarter of 2010 and may incur additional non-cash charges in future periods.
The retailer's stock managed to recuperate from 2008 lows but is far from its 2007 levels. In the past three months, the stock tumbled, losing nearly half of its value to close at $4.37 on Tuesday.