Liz Claiborne Sells Namesake Brand to J.C. Penney for $288M

Liz Claiborne Runway Looks

Photo: AP/Bebeto Matthews

Liz Claiborne will sell its eponymous label to J.C. Penney in a bid to raise needed capital and avoid liquidity concerns.

Shares are up 30% on the news.

The retailer also shopped its Kensie and Dana Buchman lines to Bluestar and Kohl’s, respectively, bringing cash proceeds to $328 million.

After the sale, the company expects 2011 net debt to total between $270 and $290 million. At the end of the second quarter this year, net debt ran as high as $769 million.

Below are divisional sale specifics from the release:

Liz Claiborne and Monet Brands:

  • Agrees to sell the domestic and international trademark rights for the Liz Claiborne, Claiborne, Liz, Liz & Co., Concepts by Claiborne, LC, Elisabeth, LizGolf, LizSport, Liz Claiborne New York (LCNY) and Lizwear brands;
  • Agrees to sell the trademark rights for the US and Puerto Rico for the Monet brand;
  • Liz Claiborne, Inc. retains international rights for Monet;
  • LCNY and Lizwear trademarks will be licensed back royalty-free to Liz Claiborne, Inc. until July 2020;
  • Liz Claiborne, Inc. will be the exclusive supplier of jewelry to J.C. Penney for the Liz Claiborne and Monet brands; and
  • Total cash proceeds of $288 million include an advance of $20 million in exchange for the Company’s agreement to develop exclusive brands for J.C. Penney.

Dana Buchman and Kensie Brands: 

  • Completed the sale of the Dana Buchman brand to Kohl’s;
  • Agrees to sell the Kensie, Kensiegirl and Mac & Jac brands to affiliates of Bluestar Alliance;
  • Aggregate cash proceeds of approximately $40 million for both transactions; and
  • Liz Claiborne, Inc. will be the exclusive supplier of jewelry to Kohl’s for the Dana Buchman brand for two years. 

DKNY® Jeans and DKNY® Activelicence:

  • Agrees to early termination of the DKNY® Jeans and DKNY® Active licence with Donna Karan International; and
  • licence will terminate at year end 2011, one year ahead of the scheduled licence maturity.

Other retailers have reported solid sales this year. See the full roundup here >

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