 American conglomerate Liz Claiborne is planning $100 million in cuts and looks at shifting its relationships with department stores. The company, which operates brands including Mexx and Juicy Couture, has seen losses
widen in the second quarter of the year.
"We fully understand that we must do much more than just cost cutting," Chief Executive Bill McComb revealed this week to discuss how the retailer plans to revive itself after posting its seventh-straight quarterly loss.
 The recovery will not come right away - Liz still expects comp stores sales to drop 15% to 25% in the third quarter and the fourth quarter is up in the air. But Liz executives say the company has enough money right now and expects to continue paying down debt this year.
Half of the $100 million will involve cutting costs in the division that sells through department stores. Contending with lower orders from these retailers and growing weary of their persistent markdowns, Liz Claiborne may do its own pulling back from the channel, although not leave it altogether, McComb said.
Some $25 million will be removed from the operation that sells Liz brands directly to consumers. Product development, distribution and outsourcing opportunities will be considered in the process.
The other $25 million will come from Liz's troubled Mexx operation, which sells mainly in Europe and is due to get a new management team this fall.
Among pricing strategies, Liz is planning to offer half of its Lucky Brand blue jeans at less than $99 starting in October, feeling the move will not only spur demand for the jeans, but have a positive halo effect on other products.
The $100 million in cost cuts Liz is making are on top of $70 million completed in the first quarter. The latest cutbacks come as Liz Claiborne posted a second-quarter loss of $82.1 million, or 87 cents a share, compared with a year-earlier loss of $23.2 million, or 25 cents a share. Excluding restructuring and other items, the latest quarter's red ink would have been 48 cents, compared with an 11-cent profit a year ago.
Image: Liz dress
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