JCPenney is currently in the process of purchasing Liz Claiborne brands from Liz Claiborne Inc. in a deal which is estimated to be worth $267.5 million. The transaction should be finalized in the next 30 days.
The deal makes a lot of sense, as JCPenney has held an exclusive license for the brands' apparel and accessories since August 2010. It is part of a ten-year agreement, which gives the department store the option to buy the fashion house out. The retail chain decided to purchase the fashion label sooner rather than later to alleviate Liz Claiborne Inc.'s substantial debts.
The deal will see JCPenney scoring the international rights and intellectual property for all Liz Claiborne Inc. brands, including Liz Claiborne, Claiborne, Liz & Co., Concepts by Claiborne, Lizwear and more.
It should be business and usual for the folks at Liz Claiborne too, with JCPenney indicating it intends to retain the fashion house's design team.
Liz Claiborne hasn't made a profit since 2006, but hopes to reverse its fortunes by focusing on its specialty high-end brands, which include Juicy Couture, Lucky Brand, and Kate Spade New York. It also plans to change its corporate name to reflect that new direction.
While Liz Claiborne Inc. might have said goodbye to its signature collections, I'm hopeful they will go from strength to strength under JCPenney. Do you think the retail chain is the right company for the job?