Liz Claiborne posts earning

The adjusted results for the second quarter and first six months of 2008 and 2007 on a continuing operations basis exclude the impact of expenses incurred in connection with the Company's streamlining and brand-exiting activities.

William L. McComb, Chief Executive Officer of Liz Claiborne Inc., said: "Second quarter adjusted EPS from continuing operations were $0.09 in what remains a very challenging macroeconomic environment. Although expected, our Partnered Brands net sales and total company operating margin results were disappointing. This was offset by demonstrated progress on a number of fronts. In particular, we generated an 18% net sales increase in our retail-based Direct Brands segment, driven by a 13% comp store sales increase in Juicy Couture and a 5% comp store sales increase in Lucky Brand. We realized tangible benefits from our streamlining activities in the second quarter, as evidenced by the $22 million year over year reduction in adjusted SG&A. We also reaped the benefits of our focus on working capital, as evidenced by the 26% reduction in inventory compared to last year. This enables a clean transition into the second half and begins to position us well for the 2009 re-launch of our flagship Liz Claiborne brand under the design direction of Isaac Mizrahi and the re-launch of our Claiborne men's business with John Bartlett as well."

Mr. McComb concluded, "We are currently in the execution phase of our turnaround. We have built strong brand teams and are accelerating initiatives that we believe will result in a solid and consistently profitable company. Our focus on improving cash management, productivity and operating margin represent big opportunities for us as we move forward. We are not expecting a significant macroeconomic recovery in the near future, but will continue to prudently execute our plans, implementing very meaningful product initiatives and driving operating margin expansion."

Net sales from continuing operations for the second quarter of 2008 were $974 million, a decrease of $75 million, or 7.1% from 2007, inclusive of a $47 million decrease associated with brands or certain brand activities that have been closed / exited and have not been presented as part of discontinued operations.

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