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 >