MiamiGent
13 years ago
LIZ Liz Claiborne 1Q Loss Narrows As Sales, Margins Improve
PROVIDED BY Dow Jones & Company, Inc. - 8:35 AM 04/26/2012
http://stockcharts.com/h-sc/ui?s=LIZ
--First-quarter loss narrows
--Two of three main brands do well
--Significantly reduces debt
By Karen Talley and Melodie Warner
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Liz Claiborne Inc.'s (LIZ) first-quarter loss narrowed as Lucky Brand and Kate Spade helped drive the apparel maker's better-than- expected sales growth. But Liz Claiborne's (LIZ) third main brand, Juicy Couture, still struggled.
With only a handful of brands after selling off many units, the performance of each remaining business is critical to the company's overall success. While Lucky Brand and Kate Spade sales increased 20% and 46%, respectively, Juicy Couture sales fell 4.4%.
Investors liked the overall results, which included a big paydown of debt, and lifted shares 4.8% to $13.29 premarket.
The company, founded by Liz Claiborne (LIZ) in 1976, plans to change its name to Fifth & Pacific Cos. (FNP) in May as it moves past the iconic brand and focuses on Juicy, Kate and Lucky.
Despite Juicy's sales decline, Chief Executive Bill McComb said he was " encouraged by the prospects for these three brands as they execute their growth strategies."
Liz Claiborne (LIZ) sold its namesake, Monet and Kensie fashion brands to department store operator J.C. Penney Co. (JCP) and sold the Dana Buchman brand to Kohl's Corp. (KSS). The Kensie brand went to Bluestar Alliance, a financial services and brand management company.
Last month, Standard & Poor's Ratings Services upgraded Liz Claiborne's (LIZ) credit junk-level rating, saying the recent asset sales helped to reduce debt and it expects the company's profitability and cash flow generation to improve.
Liz Claiborne (LIZ) reported a loss of $60.6 million, or 60 cents a share, compared with a loss of $96.3 million, or $1.02 a share, a year earlier. Adjusted loss from continuing operations narrowed to 22 cents from 32 cents. Sales dropped 4.1% to $317.1 million.
Analysts polled by Thomson Reuters had most recently forecast a loss of 14 cents a share on revenue of $307 million.
Gross margin rose to 56.5% from 53.3%.
The company said it ended the quarter with net debt of $317 million, a decrease of $381 million compared with a year ago.
(END) Dow Jones Newswires
04-26-12 0835ET
TheFinalCD
13 years ago
Liz Claiborne jumps 13 pct on buyout report
http://finance.yahoo.com/news/liz-claiborne-jumps-13-pct-213656543.html
Liz Claiborne jumps 13 pct on buyout report, company says "no contemplation" of new strategy
Associated Press – Fri, Mar 30, 2012 7:14 PM EDT.. .
NEW YORK (AP) -- Shares of clothing company Liz Claiborne Inc. jumped 13 percent Friday after The Wall Street Journal reported that the company has been considering going private.
The company said late Friday that no deal is near.
"There is currently no contemplation of any strategy for the company other than executing against the operating plan we have already discussed," Liz Claiborne said in a statement.
The company said in January that it will change its name to Fifth & Pacific Cos., a move it said was fitting after it sold the Liz Claiborne and Monet brands to J.C. Penney Co. in November.
Liz Claiborne Inc. now plans to concentrate on its Juicy Couture, Lucky Brand and Kate Spade labels and has announced other moves it says will help boost its profit, including selling its Mexx business to a joint venture led by the private equity firm The Gores Group.
The Wall Street Journal cited anonymous sources in reporting that several private-equity firms have held discussions with Liz Claiborne about the company going private. It said an asking price of around $20 a share was discussed.
That would value the firm about $2.02 billion, based on roughly 101 million shares outstanding.
The newspaper said that Liz Claiborne's conversations with private-equity firms kicked off in August, when a company initially interested in buying Liz Claiborne's Mexx fashion brand sought to buy the whole company. The Journal said Liz Claiborne was assisted by its financial adviser Centerview Partners LLC then in reaching out to other parties.
An improving credit market has reignited interest in a buyout, the Journal said.
Liz shares spiked after the Journal's report and closed at $13.36, up $1.53, almost 13 percent. That was their highest close since late 2008.
..
lady glueck
13 years ago
Equity Research on Liz Claiborne Inc. and Lululemon Athletica Inc. - Apparel Stores Dependent on Consumer Favor
Today : Monday 19 March 2012
http://ih.advfn.com/p.php?pid=nmona&article=51676078&symbol=LIZ
www.shinesrooms.com has a handpicked team of market professionals with over 100 years of combined investing experience. Today they are providing members comprehensive research on the Textile - Apparel Clothing industry and are offering free analytical research on Liz Claiborne Inc. (NYSE: LIZ) and Lululemon Athletica Inc. (NASDAQ: LULU). Register with us today at http://www.shinesrooms.com/index.php?_controller=RegisterMember&_method=index to have free access to these research reports.
Apparel clothing companies are notoriously at the mercy of consumer taste, and if merchandise misses the mark sales can plummet and reputations can deteriorate. On the other hand, if a company is getting it right, sales and profits can soar as products become shoppers' must-have-items. Get your free reports on Liz Claiborne Inc. and Lululemon Athletica Inc. at http://www.shinesrooms.com/index.php?_controller=RegisterMember&_method=index. There is no commitment to join.
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Canadian Yoga clothing company Lululemon Athletica Inc. appears to fall into the latter category and it seems set to put forward another good quarterly earnings report on March 22. The company recently raised its expectations on earnings per share to between $0.47 and $0.49, on higher net revenue in the range of $358 million to $363 million. Although some feel the increasing competition in the yoga clothing market and an influx of lower priced options could impact Lululemon, others maintain that the company's brand loyalty puts it in a league of its own. Lululemon Athletica Inc. report is accessible for free by registering today at http://www.shinesrooms.com/LululemonAthleticaInc190312.pdf.
Elsewhere in the industry, Liz Claiborne Inc. is pressing on with its transformation into Fifth & Pacific Cos., and is focusing on its most profitable brands. The company recently reported a fourth quarter profit, as the sale of certain brands boosted earnings even though profit from ongoing operations was lower than a year ago. Liz Claiborne Inc. report is accessible for free by registering today at http://www.shinesrooms.com/LizClaiborneInc190312.pdf.
The two Textile - Apparel Clothing stocks research reports are available for free by signing up now on www.shinesrooms.com.
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Shine's Rooms is the brainchild of David Shine, a 13-year Wall Street veteran with a stellar track record. For 13 years Shine has trained thousands of traders to navigate and profit from the markets. Using cutting-edge technology, Shine provides you with a community in which you can trade alongside Shine and his Team as they guide you through the market's ever-changing landscape.
To view our disclaimer, visit this link http://www.shinesrooms.com/disclaimer.html.
lady glueck
13 years ago
@11.43 Critical Alerts for Research in Motion, Gap, VMWare, Liz Claiborne, and Lululemon Released by Seven Summits Research
http://ih.advfn.com/p.php?pid=nmona&article=51459682&symbol=LIZ
CHICAGO, March 2, 2012 /PRNewswire/ -- Seven Summits Research issues critical PriceWatch Alerts for RIMM, GPS, VMW, LIZ, and LULU.
To see what our analysts have discovered about these stocks read the Seven Summits Strategic Investments' PriceWatch Alerts at http://www.iotogo.com/s/030212A (Note: You may have to copy this link into your browser then press the [ENTER] key.)
Today's PriceWatch Alerts cover the following stocks: Research in Motion (Nasdaq: RIMM), Gap (NYSE: GPS), VMWare (NYSE: VMW), Liz Claiborne (NYSE: LIZ), and Lululemon Athletica (Nasdaq: LULU).
In today's unsure markets these brief PriceWatch Alerts contain concise, detailed strategies for each covered stock and include position protection tactics designed to potentially defend investors from unexpected market shifts. While other market reports only provide stock news and opinion, we offer strategies that position investments against uncertainty and increase chances of making a profit, even if a stock goes down.
"Our PriceWatch Alerts go beyond other market reports. Along with a brief concise overview, each PriceWatch Alert provides useful strategies, which ensure potential investments are protected with basic hedging techniques," says Reid Stratton, Seven Summits Senior Analyst. "These brief company reports contain information that can benefit expert and novice investors who want to stay ahead of the market."
For essential information on stocks poised to move go to: http://www.iotogo.com/s/030212A for Seven Summits Strategic Investments' PriceWatch Alerts.
Seven Summits Investment Research is an independent investment research group, which focuses on the U.S. equities and options markets. Our analytical tools, screening techniques, rigorous research methods and committed staff provide solid information to help our clients make the best possible investment decisions. For more information go to www.SevenSummitsInvestmentResearch.com. CRD# 137114
All stocks and options shown are examples only-- not recommendations to buy or sell. Our picks do not represent a positive or negative outlook on any security. Potential returns do not take into account your trade size, brokerage commissions or taxes--expenses that will affect actual investment returns. Stocks and options involve risk, thus they are not suitable for all investors. Prior to buying or selling options, a person should request a copy of Characteristics and Risks of Standardized Options available at http://www.cboe.com/Resources/Intro.aspx. Privacy policy available upon request.
lady glueck
13 years ago
LIZ some DD for your better understanding
http://seekingalpha.com/article/301383-liz-claiborne-shedding-brands-gaining-growth-potential?source=yahoo
Liz Claiborne: Shedding Brands, Gaining Growth Potential
by: Adam Muller October 23, 2011 | about: LIZ Font Size:
Liz Claiborne Inc (LIZ) announced multiple transactions on October 12, including:
the sale of the Liz Claiborne and Monet brands to J.C. Penney (JCP);
the sale of the Kensie brand to Bluestar Alliance; and
the completion of the sale of the Dana Buchman brand to Kohls (KSS).
These deals, in addition to the Mexx joint venture announced on September 2 (which the company continues to believe is on track to close in the fourth quarter of this year), complete the company's transformation. What is left is a company with three core brands (Lucky Brand, Juicy Couture, and kate spade), and a much cleaner, less leveraged balance sheet. In total, the deals will result in net cash proceeds of $328mm, which will be used to pay down debt. The company guided year-end 2011 net debt to be in the range of $270 to $290mm. Liz also provided pro forma adjusted EBITDA guidance for 2011 and 2012. For 2011, EBITDA guidance is now a range of $80 to $90mm, and for 2012 the range is $130 to $150mm.
CEO William McComb was on CNBC this past Friday discussing the deals. It’s worth taking a listen.
The stock responded very positively to the announcement. On October 12, LIZ closed at $6.84 per share, up 34% from its prior close of $5.10. And it continued to trade up closing on October 21 at $7.91, up 55% from its October 11 close.
This is a very different company than it was on October 11 before the announcement. First, the three brands it is left with are strong, well-recognized businesses. The table below shows same-store-sales for the three brands for the last 6 months. While Juicy Couture is still in middle of its turn-around, Lucky Brand is doing very well, and kate spade is growing at an incredible rate that puts it amongst the best retail brands out there, next to the likes of Coach (COH) and Lululemon Athletica (LULU).
Same-store-sales April 2011 and September 2011
April
May
June
July
August
September
Juicy Couture
(17)%
14%
(8)%
(3)%
(8)%
(11)%
Lucky Brand
1%
23%
24%
16%
10%
13%
kate spade
44%
82%
88%
56%
65%
54%
Source: Liz Claiborne investor presentations
Valuation
At its October 21 closing price of $7.91 per share, Liz has a market capitalization of approximately $750mm. With $270mm of pro forma net debt, its enterprise value is $1.1bn. Based on its 2011 pro forma adjusted EBITDA guidance of $80 to $90mm, Liz is trading at 11.3 - 12.7x adjusted 2011 EBITDA.
However, based on its 2012 pro forma adjusted EBITDA guidance of $130 to $150mm, Liz is trading at 6.8 - 7.8x adjusted 2011 EBITDA.
To provide some context around these multiples, consider where comparables trade based on trailing 12 month EBITDA.
Comparable Company
Trailing 12 Month EBITDA
Coach Inc (COH)
11.6x
VF Corp (VFC)
11.9x
Ralph Lauren Corp (RL)
11.4x
Lululemon Athletica (LULU)
27.5x
Abercrombie & Fitch (ANF)
10.2x
Juicy Couture, despite being an ongoing turnaround story, has a solid revenue base and a loyal customer following. Lucky Brand is performing well, but it should still trade at a discount to Abercrombie & Fitch (ANF) given Abercrombie’s brand awareness and global positioning. kate spade is an incredible growth story, akin to Lululemon and Coach.
Reasonable multiples for the three brands are presented in the table below:
Multiple
Rationale
Juicy Couture
5.0x
Turn-around project that needs to show results before a higher multiple is justified
Lucky Brand
8.0x
Approximately a 20% discount to Abercrombie’s multiple
kate spade
12.0x
In-line with Coach’s multiple, but still well below Lululemon
In the second quarter Juicy made up 42% of sales, Lucky made up 34%, and Kate made up 24%. However, given their respective growth profiles, these percentages are quickly shifting towards kate spade and Lucky.
Assigning weights of 40% for kate spade and Lucky Brand, and 20% for Juicy Couture, the blended multiple for Liz would be 9.0x.
Assuming the midpoint of the 2012 adjusted EBITDA range ($140mm) would result in an enterprise value of $1.26 billion, a market capitalization of $989 million, and a price per share of $10.45, a 32% premium to its current price.
If Juicy Couture gets back on track there is further upside to the story, as the blended multiple would increase. Downside risks include a failure to complete the turnaround at Juicy. Also, if economic conditions worsen, all three brands could be negatively impacted. And, as always with retail, missing fashion trends and becoming yesterday’s news can degrade sales.
Conclusion
Liz is a different company than it was a week ago, and that is why, in addition to the divestitures announced last week, the company is also going to change its name. If management’s revised pro forma guidance for 2012 is correct, the company is significantly undervalued, and there is a reasonable margin of safety at its current level. Shedding businesses so that investors can focus on its three core brands results in more transparency, and, with a less leveraged balance sheet, investors can stop worrying about Liz’s ability to remain an ongoing concern. The most significant risk is the economy, which if it falls into recession could impact growth and pull down 2012 EBITDA estimates.
Disclosure: I am long LIZ.
dollars2bhad
13 years ago
you are ever so right...the current valuation is ridiculous...
Liz Claiborne Starts Over
Posted: Oct 17, 2011 11:13 AM by Stephen D. Simpson, CFA
Sometimes press releases can understate just what's actually going on. That certainly seems to be the case with Liz Claiborne (NYSE:LIZ). While this well-known women's clothing designer and marketer talked about "transactions" in the headline of its recent release, the reality is that the company largely sold itself and is basically going to cease to exist as Liz Claiborne.
From Distribution to Ownership
Liz Claiborne and J.C. Penney (NYSE:JCP) have had a longstanding relationship, and JCP was already the exclusive license partner for the Liz Claiborne brands. The two companies have taken a big step forward though, as LIZ will be selling the Monet and Liz Claiborne brands to J.C. Penney for $288 million in total cash considerations. LIZ will maintain the international rights for Monet, will continue to supply Liz Claiborne and Monet-branded jewelry to J.C. Penney and will hold a royalty-free license on LCNY and Lizwear, but will otherwise be out of these businesses.
At the same time, the company is selling the Kensie brands to Bluestar Alliance and Dana Buchman to Kohl's (NYSE:KSS). These two deals will reap an additional $40 million for LIZ, and as in the case of J.C. Penney there was a preexisting retail relationship between LIZ and Kohl's.
Last but not least, the company will end its DKNY license a year early (ending this year). (For related reading in retail, see The 4 R's Of Investing In Retail.)
Much Needed Cash at a Reasonable Valuation
LIZ has been struggling for quite a while now, and management had little choice but to make some tough and drastic decisions. The company punted its money-losing Mexx business earlier in August, but clearly had to do more. With these deals, LIZ got rid of businesses that were losing money but still had clear brand value. Moreover, in selling these brands, at roughly eight times EBITDA, the company got a pretty fair price for them as well.
Now the company will have nearly $330 million to apply towards debt reduction - a sum that should leave the company with less than $300 million in long-term debt, and about $500 million in total debt at year-end.
Can Liz Wring Profits from What Remains?
After this deal, LIZ will be largely left with the Kate Spade, Lucky and Juicy Couture brands. On the positive side, sales trends aren't too bad here. Juicy comps were down in September, but Lucky and Kate Spade were both up nicely, and these brands posted almost 18% overall sales growth in the last quarter.
Profitability is a trickier question, though. While these brands were the only profitable parts of Liz Claiborne, in fiscal 2010, they have tripped over into operating losses so far this year. That isn't so encouraging given the performance at companies like Oxford (NYSE:OXM), VF Corp (NYSE:VFC) or Jones Group (NYSE:JNY), to say nothing of the recovery at women-oriented retailers like Chico's (NYSE:CHS).
Said differently, LIZ bought itself some breathing room with these deals, but they will only prolong and delay the inevitable if management can't figure out how to drive sustained profitability from those growing, younger-skewing brands that it's keeping.
The Bottom Line
This was pretty much what a deep-value investor would have been looking for when considering these shares below $5. Unfortunately, management has now fired that silver bullet, and the ultimate outcome of this story is still very much in doubt. Given that the company has shown that it can produce profits from the brands it's keeping (even if not on a consistent basis), a private equity buyout shouldn't be out of the question. (Private equity investing is becoming more accessible for individual investors, find out how you can get involved. For more, see A Primer On Private Equity.)
In the meantime, the sale of the Liz Claiborne brand to J.C. Penney means a name change is all but certain. Beyond this transaction, this is a stock that should only appeal to the most risk-tolerant turnaround investors. The new Liz Claiborne certainly could be an improved company, and may be able to rebuild the name into a retail winner. That is going to take a lot of time to realize, though, and investors should not buy this stock with the expectation of a quick turnaround.
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
By Stephen D. Simpson, CFA
Read more: http://stocks.investopedia.com/stock-analysis/2011/Liz-Claiborne-Starts-Over-LIZ-JCP-KSS-OXM-VFC-JNY-CHS1017.aspx?partner=YahooSA#ixzz1b5vz066I
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