Liz Claiborne Inc. has agreed to sell its Liz Claiborne and Monet brands to J.C Penny Co. for $288 million, and its Kensie brand to Bluestar Alliance. This sum will help the company bring its other brands, Kate Spade, Juicy Couture, and Lucky Brand Jeans, out of debt. This announcement itself propelled shares to 36% on Wednesday. As part of the deal, the company will have to change its name in 12 months.
Having reported 15 consecutive quarter losses, Liz Claiborne Inc. has begun the process of rebuilding its brands. Once the deal is finalized, Liz Claiborne Chief Executive Bill McComb believes the company will become “a more capital efficient, dynamic, growth-oriented, retail-based company with a dramatically reduced risk profile” (WSJ.com). Down sizing the company will help to prioritize the companies efforts towards the brands that need to flourish in the market place.