Liz Claiborne Inc.'s (LIZ) fourth-quarter net loss almost doubled as revenue plunged and the struggling women's apparel retailer took $693 million in write-downs, doing little to appease concerns about its turnaround.

Chief Executive William McComb called the fourth quarter "the most challenging environment the company has experienced in decades."

The immense pressure comes as Liz Claiborne is in the midst of an ambitious overhaul that includes trying to launch a new line while improving its other ones amid the worst economic downturn in generations. Liz Claiborne shares were recently down 30 cents, or 11%, to $2.52. Shares have lost 86% over the past year.

During a conference call with analysts, McComb said the Isaac Mizrahi-designed line that Liz Claiborne has just begun rolling out -- and is seen as a key to restoring the company's fortunes and reputation -- is seeing positive early response "and the potential for selling more items at full price than the line it is replacing offers tremendous profit upside."

The Liz Claiborne New York line's roll-out is proceeding on schedule into department stores including Macy's Inc. (M) and Dillard's Inc. (DDS), and Liz Claiborne's own outlets, McComb said.

The comments came after Liz Claiborne posted a fourth-quarter net loss of $828.9 million, or $8.85 a share, compared with a year-earlier net loss of $435.7 million, or $4.55 a share. Results for the prior-year period also included write-downs. Excluding those and other items, Liz Claiborne would have posted a 4-cent loss, compared with year-earlier earnings of 20 cents.

Revenue decreased 22% to $911.2 million. Analysts polled by Thomson Reuters, on average, most recently expected $995 million.

Adjusted gross margin decreased 260 basis points driven by the highly promotional retail environment, the company said.

Like many other retailers, Liz Claiborne said it would not provide an earnings outlook for the full year because of economic uncertainties.

The company does expect a "meaningful" first-quarter loss, narrowing each quarter afterward, and same-store sales declines of 15% to 25% through the third quarter for all of its brands, McComb said. Analysts expect a 9-cent loss for the first quarter.

Liz Claiborne also fine-tuned its capital expenditure plans, going from earlier announced expectations to cut 2009 spending to less than half of last year's $194 million, to now projecting $60 million to $70 million.

While Liz Claiborne has made progress in paying down debt, the company ended the fourth quarter with a cash position of $25 million compared with $205 million a year ago.

Capital-raising avenues include sales of real estate and sale leasebacks of certain properties, company executives said.

Liz Claiborne also expects to benefit from a roughly $90 million federal tax refund it received last month and $83 million from turning over its sourcing and manufacturing -- except jewelry -- to Hong Kong global apparel exporter Li & Fung.

The company's fourth-quarter non-cash write-downs reflect concerns about its financial condition. The $683 million charge was because the company's market capitalization fell below its book value during the quarter, with $301 million also related to drops in performance of the company's business segments and its cash flows. The $10 million balance of the write-down is tied to a trademark impairment charge.

The company plans to open just 12 stores in 2009, compared with 139 in 2008, part of a "ruthless" cost management drive this year, McComb said.

Liz Claiborne is also tinkering with brands other than the new Liz Claiborne New York line. For its Juicy line, Liz Claiborne is expanding intimates and loungewear while discontinuing the men's business. At Kate Spade, the company is launching a key item apparel business and further expanding its jewelry business. Liz Claiborne's Lucky brand is nearly doubling tops as a percentage of its total assortment.

The company is still trying to turn around its Mexx unit, an effort that is already several years old. This year "will again be a transition year," McComb said.

Liz Claiborne still has a way to go, but is making progress in areas like improving its balance sheet by paying down debt and is very focused on operational cash flow generation, said Jennifer Black, president of Jennifer Black & Associates, a retail consulting firm. "This should enable them to focus on key initiatives."

Liz Claiborne is also "contending with the environment, getting customer traffic back, which is true for virtually any retailer," Black said.

Most retailers have been hurt by the recession as many consumers trade down to discounters. Those dealing in women's clothing were hurting even before the onset of the global downturn, as consumers weren't drawn by fashion choices.

And in addition to seeing slower sales at its own stores, Liz Claiborne has suffered as department stores cut back inventory.

McComb said Wednesday the company reduced inventory by 14% compared with a year earlier and ended the year with $744 million in debt, below the range it projected in November.

-By Karen Talley, Dow Jones Newswires; 201-938-5106; karen.talley@dowjones.com