UPDATE 2-Liz Claiborne hires Mizrahi in a loss to Target

(Adds byline, changes dateline previous ATLANTA, recasts, adds quotes from Target and analyst, adds background)

By Alexandria Sage and Nicole Maestri

LOS ANGELES, Jan 15 (Reuters) - Apparel maker Liz Claiborne Inc (LIZ.N) stole Isaac Mizrahi away from Target Corp (TGT.N) on Tuesday, naming the designer creative director of its Liz Claiborne brand in a move that ends Mizrahi's five-year deal with the mass-market chain.

The apparel company said it hired Mizrahi to help "revitalize" the Liz Claiborne brand, its traditional women's sportswear line that has faced sluggish sales in recent years amid a tired image and competition from private-label brands.

The move is a blow to Target, whose collaboration with Mizrahi pioneered the concept of designer fashion at mass- market retail chains, one that has been copied extensively by competitors.

At Liz Claiborne, Mizrahi will oversee the design and marketing functions for women's apparel, accessories and licensing. His first collection for the brand will arrive in stores in spring of 2009, the company said.

Mizrahi's apparel, accessory and shoe designs have been sold at Target since 2003. His Target collection will be available through the end of 2008.

It was not immediately clear how the loss of the well-known Mizrahi would affect the bottom line at Target.

"We just remain confident that we'll continue to drive sales and make great design affordable through our combination of own brands, signature national brands and our other design fashions," a Target spokeswoman said.

But retail analyst Joseph Feldman of Telsey Advisory Group was less positive.

"I don't think it comes at a very good time, given that their sales have been under pressure and there has been some concern about the strength of their apparel business," Feldman said.

Target's apparel, which once delighted shoppers, struggled during the crucial holiday season. In recent months, shoppers at the discount retailer have passed over discretionary purchases such as apparel and home decor in favor of basics such as food and health care items.

HOPING BIG NAMES BRING BUZZ

It was the second announced hiring this week of a noted designer by Liz Claiborne, which is seeking to move from a wholesaler of traditional women's sportswear to a high-growth retailer of trendy apparel and handbags.

The company is shedding its underperforming brands to focus on a handful of younger brands such as Kate Spade and Juicy Couture.

On Monday, it hired designer John Bartlett, who has had runway shows at New York's Fashion Week, to design a revamped men's sportswear line to hit stores by spring 2009.