New York, NY
212.354.4900
www.lizclaiborne.com
Sales: $220 million

Sales:

$220 million (estimated) for cosmetics, toiletries and fragrances. Corporate sales: $4.5 billion. Net loss: $373 million.

Key Personnel:

William L. McComb, chief executive officer; Art Spiro, president, Liz Claiborne Cosmetics.

Major Products:

Juicy Couture, Curve by Liz Claiborne, Lucky Brand and the Liz, Realities, Bora Bora and Mambo fragrances.

New Products:

Usher fragrance.

Comments:

Last month, Elizabeth Arden and Liz Claiborne Inc. entered into an exclusive long-term global licensing agreement for the manufacture, distribution and marketing of the Liz Claiborne fragrance brands. Claiborne’s fragrance portfolio consists of many brands, including the Juicy Couture, Usher, Curve by Liz Claiborne, Lucky Brand and the Liz, Realities, Bora Bora and Mambo fragrances.
   
“Fragrance is an important equity enhancing category for our brands. For us to maximize profitability in this business going forward, however, we would have to make significant changes to how it is operated. Doing that right now would distract us from other initiatives currently underway that are core to our strategy,” explained William L. McComb, chief executive officer of Liz Claiborne Inc. “Through this partnership with Elizabeth Arden, we can continue to successfully develop and market brand enhancing fragrances in a more capital efficient manner, leveraging our strength in brand building with Arden’s expertise in developing and growing fragrance businesses.”
   
According to Mr. McComb, the transaction will have a positive impact on 2008 cash flows and no impact on 2008 projected adjusted EPS and operating margin. Moreover, the impact of the royalty income from this transaction is expected to be accretive to both EPS and operating margin in 2009.