Liz Claiborne announces restructuring to save 190 mln usd; tightens guidance

Liz Claiborne announces restructuring to save 190 mln usd; tightens guidance

	Published : Wed, 11 Jul 2007 12:45 By : Agencies Print this Story

LONDON (Thomson Financial) - Apparel maker Liz Claiborne Inc said is reviewing strategic alternatives for 16 of its brands as part of a massive restructuring that includes job cuts and which it hopes will generate cost savings of 190 mln usd by 2010.

The announcement came as executives laid out the long-term growth plan at an investor conference today.

As part of this, Liz Clairbone tightened its full-year guidance, saying it expects EPS of between 1.90-2.00 usd, with adjusted net sales expected to be flat to down by low-single digits compared with last year.

In the second quarter, it expects adjusted EPS of between 0.22-0.24 usd and adjusted net sales to be flat compared with last year.

For 2008, Liz Claiborne predicted EPS of 2.35-2.50 usd on sales of between 4.2-4.3 bln usd.

'Over the long-term, the company expects to achieve annual revenue growth in the high single digits, operating margin in the mid-teens, EPS growth in the high-teens, and a return on invested capital in the high-teens,' the company said.

Under the reorganisation, the company expects to generate cost savings of 100 mln usd in 2008, and 45 mln usd each in 2009 and 2010.

'These savings, which will drive significant operating margin expansion beginning in 2008, will be realized through the streamlining of corporate management, consolidation of organizational structure and fewer layers in our

Partnered Brands, cost rationalization in our supply chain and

reduction in corporate overhead throughout the company,' Liz Claiborne said.

The company said it expects to cut in 2007 a net 600-800 jobs, or 7-9 pct, of its non-retail based global work force. These include 'significant' staff reductions at the more senior levels of the organisation.

It said the review of strategic alternatives for the brands of review include possible divestiture, discontinuation, or licensing. It named the brands as: C&C California, Dana Buchman, Ellen Tracy, Emma James, Enyce, First Issue, Intuitions, J.H. Collectibles, Kensie, Laundry by Design, Mac & Jac, prAna, Sigrid Olsen, Stamp 10, Tapemeasure and Tint.

'The company will concentrate on powerful brands with strong direct-to-consumer growth paths, as well as a refined group of wholesale-based brands with robust consumer franchises,' the company said.

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