Claiborne to cut stores, 500 jobs
Just a day after public announcement was made that Liz Claiborne lost out on its bid to purchase women’s apparel retailer J.Jill Group, Liz Claiborne announced it will eliminate 500 jobs and close nearly two dozen stores as a part of a restructuring program. “While it is always a difficult decision to eliminate staff, this is the right thing to do for the business,” said Paul R. Charron, Claiborne’s chairman and CEO. “In an increasingly competitive marketplace, these changes will make us a nimbler, more flexible organization that is closer to our customers and better positioned to optimize our assets and increase profitability and shareholder value.” Claiborne executives expect savings from the 4 percent personnel cut to total between $30 million and $35 million in 2006 and from $60 million to $65 million annually beginning in 2007. Significant staff reductions at senior levels will be included, according to Claiborne officials. A wholesaler to retail stores of clothing brands including Ellen Tracy, Dana Buchman and their namesake, about one-fifth of Claiborne’s revenues come from its company stores. The company’s restructuring, which will result in brands and operations being grouped according to consumer offerings and retail channels, is expected to result in charges of $60 million, most of which will be seen in the first half of 2006. Claiborne had been in negotiations since November to purchase J.Jill Group. Instead on Monday, J.Jill announced it accepted a $517 million buyout offer from Talbots, putting an end to Claiborne’s plans.