Depending on your age and/or economic bracket, you may not even know the women’s apparel brand Liz Claiborne all that well. You may also not know the jewelry brand Monet. But the parent company that owns them, Liz Claiborne, has elected to sell both of those brands to J.C. Penney, plus its Dana Buchman brand to Kohl’s and Kensie to another group, all to raise around $328 million. And it will no longer even own the famous name that acted as the banner above all their brands.
This builds on other divestitures LIz Claiborne made this summer, including among other things the sale of fragrance licenses to Elizabeth Arden.
Lest you think this was all about just cutting debt and finding a way to survive in a tough economy, take a look at what Liz Claiborne kept. Those included Juicy Couture, kate spade, and Lucky Brand. All of these, unlike what it dropped, are aimed at higher-income customers. And in this particular recession, like several before it, higher-income customers continue to be some of the best customers. Lucky Brand reported a 24% in sales in September, for example, and kate spade’s designer accessories logged in a sales increase of over 114%.
Recessions, perhaps even more so than the beginnings of economic expansions, represent an excellent time to clean house. So even though it may seem a bit early for “spring cleaning”, Liz Claiborne (or whatever it’s new name will become) has strategically elected that fall 2011 is a great time to get rid of the old stuff and focus on the new.
It’s a good model for all of us as we all plan what innovations and strategies to lead our own organizations forward into 2012.
Need to refocus your own product portfolio, and maybe redirect your own strategies in a new direction? Contact us at ideas@stranova.com.