Summary
Is it possible for Isaac Mizrahi to return the Liz Claiborne NY brand to its former glory, while, at the same time work with QVC to design and hawk a mass appeal apparel line on television; build his own designer level brand (complete with with runway shows during fashion week) and open his first retail shop on New York's fashionable East Side?
Liz Claiborne's CEO Bill McComb bet the farm that Isaac Misrahi would turn the brand around, but hasn't the celebrity designer spread himself too thin?
Analysis
When Bill McComb was lured away from Johnson & Johnson to replace Paul Charon as CEO of Liz Claiborne Inc., many apparel industry veterans, myself included, questioned whether Mc Comb's lack of apparel and retail experience would handicap him strategically, as he took on the task of changing the fortunes of the iconic apparel giant.
Hiring celebrity designer Isaac Mizrahi to turn around the company's Liz Claiborne NY brand might have made some sense if he were singularly committed to Liz.. Instead, Isaac's contract with the company permits him to design and promote his own designer level collection, create a new line (along with TV appearances) for QVC and open his own retail stores.
When Liz Claiborne started up her namesake business in the late 70's with her husband and two talented partners, she applied all her time and extraordinary talent to compete favorably in the highly competitive "better sportswear" sector. It took some time and effort, but within a few years Liz Claiborne was the best performing better sportswear brand in major department stores.
A more experienced CEO might have insisted that isaac devote all of his efforts to turning Liz around, or find someone else. The creative process of fashion design is a tough act under the best of circumstances and it's my guess that if if McComb had the benefit of some apparel industry experience, he would have foregone celebrity and hired someone focused exclusively, on rebuilding the brand.
In all fairness, Isaac's fall and spring lines were well received by many department store executives around the country, but performance to date has been below expectations.
If Liz Claiborne NY, (not to mention the floundering MEXX) continues to be a drag on the company's bottom line, the short term outlook for the corporation is very bleak.
Martin Brill consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
