Claiborne to shape up U.S. assets

NEW YORK (Reuters) - U.S. clothing maker Liz Claiborne Inc (LIZ.N) does not plan any acquisitions in the near term but would be interested in owning a European brand, its chief executive officer said on Thursday.

"I'm very attracted to another lifestyle brand in Europe," Chief Executive William McComb said in an interview. "It's a big world out there. We're still awfully U.S.-centric."

He declined to name an example, adding that he did not want to buy anything in the next 18 to 24 months.

"We have a lot of proving to do around here," McComb said.

The former Johnson & Johnson (JNJ.N) executive, who joined Liz in November 2006, is overhauling the fashion company, whose portfolio swelled over the years to encompass more than 40 brands.

Of 16 brands put on the block last summer, the New York-based company said it would keep three, including Kensie and Mac & Jac; sell eight, including Ellen Tracy and Prana, discontinue or merge four into other labels; and license its Dana Buchman line to Kohl's Corp (KSS.N).

At the same time Liz is focusing more keenly on Mexx, Juicy Couture, Lucky Brand Jeans and Kate Spade, which have their own stores and appeal to younger, more fashionable customers than some of the other brands.

"MULTI-MONOBRANDER"

Wholesale apparel companies like Liz and Jones Apparel Group Inc (JNY.N) have been squeezed in recent quarters by high labor and commodity costs, lower orders from department stores as they consolidate and promote their own private labels, and a decline in spending by cash-strapped U.S. consumers.

McComb said his turnaround strategy has been characterized as trying to reduce Liz's dependence on department stores, expand internationally to diversify the currency of its revenue stream, and to deepen its offering of accessories.

"It has all of those elements, every single one, but that's not the strategy. The strategy is to build a brand engine -- an engine that produces powerful, powerful brands."

He said he was not following the lead of retailers that run several chains with similar concepts, like Abercrombie & Fitch Co (ANF.N) and Urban Outfitters Inc (URBN.O). His model was "monobrand" names like Coach Inc (COH.N) and Polo Ralph Lauren Corp (RL.N), though Polo also operates the Club Monaco chain.

"I call us multi-monobrander. I want my brands to enjoy all the advantages that Coach had as a free-standing, monobrand company, here under the auspices of a multi-brand portfolio," McComb said, adding he wasn't interested in consumers knowing, for example, that Juicy Couture and Kate Spade share an owner.

This approach can support a "handful" of brands, he said, "and not much more than that. I think that four or five is the most, at the high end of it."

Aside from the four "direct" brands, Liz still owns its namesake brand, which is about to be revitalized by fashion designer Isaac Mizrahi, and other brands such as Enyce.

"BIG, SHORT-TERM RECESSION"

McComb said even though many of Liz's customers, "female head-of-households with two to four children," were spending less on clothes in the face of declining home values and investment accounts, he was confident Liz would weather "this big, short-term recession," by conservatively managing its cash and inventories.

Making the company debt-free is a goal McComb said he is working toward, rather than changing the company's dividend payout or buying back shares.

But Liz also isn't going to slow store expansion, McComb said, noting its brands are still small and good real estate is hard to come by.

"I'm not crazy-bearish," McComb said, adding that the U.S. economy's pillars were still intact. "But I (do) think it gets worse before it gets better."

(Editing by Brian Moss and Braden Reddall)