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Liz Claiborne announces fate of 4 brands
NEW YORK (Reuters) - Liz Claiborne Inc (LIZ.N) revealed the fate of four more brands on Tuesday, moving toward the end of a major restructuring announced last year by its new chief executive.
But investor enthusiasm was tempered after the company said it expects to incur "significant" charges related to the moves and is determining how much they will be.
As part of its plan to go from a wholesaler of traditional women's sportswear to a high-growth retailer of trendy fashion apparel and handbags, Liz Claiborne will discontinue the Sigrid Olsen brand and keep the Enyce brand.
It plans to close its 54 Sigrid Olsen stores by mid-2008 and said there was potential to redeploy up to a dozen of them for the chains it is turning most of its attention to -- Mexx, Juicy Couture, Lucky Brand Jeans and Kate Spade. The closures should result in costs of $17 million to $22 million, the company said.
Liz Claiborne will also keep the urban brand Enyce and plans to launch the brand's RSRV line at department stores later this year.
The New York-based company also agreed to sell its C&C California and Laundry by Design brands to Perry Ellis International Inc (PERY.O) for $37 million.
Perry Ellis, which focuses on menswear with brands that include Perry Ellis, Cubavera and Savane, said the deal marks its entry into the contemporary women's apparel market.
The sale is expected to close by February 4 and add $60 million in 2009 revenue and 8 cents to 10 cents per share in profit, Perry Ellis said.
The company said it will combine the operations of C&C and Laundry with those of its Original Penguin brand to create a new women's apparel business, whose revenue it sees increasing at a double-digit annual rate over the next five years.
Liz Claiborne, which put 16 brands up for sale last summer, expects to announce plans for the remaining five brands under review -- Dana Buchman, Ellen Tracy, Kensie, Mac & Jac and prAna -- by the end of the first quarter of 2008.
It has already sold four brands to Li & Fung Ltd (0494.HK), discontinued one and wrapped two others into existing brands.
Perry Ellis shares were down 14 cents at $13.73 in afternoon trading on the Nasdaq.
(Reporting by Martinne Geller; Editing by John Wallace/Andre Grenon)
