What follows is an excerpt from Bill McComb’s remarks at LCI’s Annual Shareholders Meeting held on May 19, 2011.
The fruits of our labors in restructuring the company have begun to show in a few meaningful areas.
The re-launch of the Liz Claiborne brand, with our exclusive licensing deal at JCPenney, has already proven to be profitable and significant in re-acquainting the brand with the vast audience of consumers who know and respect it. JCPenney has not only committed great floor space to the brand, they have given it the marketing campaigns it has deserved and not seen since the days when Jerry Chazen, who is sitting right here in front of me, was running the company. The Liz Claiborne brand franchise is well on its way to achieving Mike Ullman’s one billion dollar retail sales goal. In turn, it is driving hundreds of thousands of new customers into JCPenny’s doors.
Those of you attending the meeting here live will have the chance to see our fall 2011 line with the Liz Claiborne and Claiborne management and design teams today. Combined with channel, product, and cost initiatives across the partnered brands portfolio, we expect this segment of the business will be profitable in 2011.
Another source of pride is the Dana Buchman license with Kohl’s – a business that today at Kohl’s is larger and more profitable than the previous rendition of the brand in 2006 in traditional higher end department stores.
Similarly, it may be hard to remember, but less than 5 years ago when the company acquired kate spade, it was a struggling brand, unable to execute. But we invested in talent and supported a complete overhaul of the creative vision and the operation. Again, like the heritage Liz Claiborne brand, the results are very strong—an extremely profitable and high growth business with seemingly unlimited global potential. Late yesterday we announced a major joint venture with E.Land to take this brand into China in a meaningful way—just one more step on a path to globalize the brand.
Our acceleration of Lucky Brand has been bumpier, but in the past year, we have made major strides. With a strong leadership team, and very strong merchandising and operations, we are enjoying solid positive comp door growth in our retail stores since mid January—a trend we expect will continue through this year. The marketing, the in store experience, the product is all resonating with consumers.
Our most profitable brand, Juicy Couture, enjoys very broad awareness and popularity in markets around the world—more so than any of our brand assets. Now predominantly a retail-based business domestically, we are completely refreshing our Juicy Couture stores, our marketing and our product. In other words, we are undergoing the same kind of internal transformation at Juicy Couture that we implemented two years ago at kate spade—and we could not have found a better person than LeAnn Nealz, our new creative director, to lead the charge.
Finally, we have made progress at Mexx Europe—where we see positive consumer reaction and purchasing of our repositioned brand in the wholesale channels. We have committed partners, and with the order book we see for Fall 2011, we will have posted twelve full months of double digit increases in wholesale bookings. But the retail division is still losing money—and is therefore undergoing major restructuring this year. We continue to pursue our goal of breakeven operating profit for the global brand by the end of 2012—and our ability to achieve this goal will significantly impact the total profit picture of the corporation. I believe we have an outstanding CEO in Thomas Grote in this business, who is also here at the meeting today.
So to summarize, we have made sustainable progress in 2010 and remain optimistic about our growth opportunities. As always, our goal remains to create value for our shareholders by building an industry leading portfolio of brands.