Liz Claiborne Inc

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Liz Claiborne, Inc.
Type Publicly Traded Corporation
Founded 1976
Founder(s) Liz Claiborne, Art Ortenberg, Leonard Boxer and Jerome Chazen
Headquarters United States
Key people William L. McComb (CEO)
Industry wholesale apparel, wholesale non-apparel, retail
Products apparel, accessories, and fragrance products
Revenue 2006 Net sales: USD 4,994,318,000 [1]
Net income USD 254,685,000 (2006) [2]
Employees 17,000[3]

Liz Claiborne Inc. designs and markets branded women's and men's apparel, accessories and fragrance products. The Company operates the following business segments: Wholesale Apparel, Wholesale Non-Apparel and Retail. Its current portfolio of brands includes most apparel and non-apparel categories, reaching consumers of various age, gender, size, attitude, shopping or value preference. These products range from classic and traditional apparel to modern and contemporary wear.

Company History

In 1976, Liz Claiborne, Art Ortenberg, Leonard Boxer and Jerome Chazen - created what is now a nearly $5 billion public company. Established at a time when women were entering the workforce in large numbers, Liz Claiborne and her partners saw the opportunity to provide versatile, fashionable wardrobes that were appropriate for work, but still conveyed a sense of individuality and femininity. In contrast to department store practice at the time, Liz Claiborne presented all of the brand's related sportswear pieces in one department. In the mid- 1970s and into the early 1980s the Company started testing the concept of manufacturing overseas. Liz Claiborne established a production control office in Hong Kong by mid-1976. Liz Claiborne Inc. now sources its products in more than 40 countries around the world and routinely ships five million units per week in the U.S. alone. The company went public in 1981.[4]

Historical Financial Information

Fortune Apparel Industry 2007 rank: 3[5]

  • Fortune 500 2007 rank: 451[6]
  • Most profitable public U.S. apparel firms rank: 17 [7]

Annual Income Statement

Business Strategy

  • The company markets its clothing and accessories as designer items but prices them for a broader market. Including Ellen Tracy, Laundry, Liz Claiborne, Crazy Horse, and Dana Buchman, its brands are sold worldwide in department stores, its more than 280 specialty stores, its more than 260 outlet stores, and numerous brand Web sites. Liz Claiborne also makes men's clothing and licenses its name for shoes, sunglasses, swimwear, and home furnishings. Over the last few years, the company has focused on buying and licensing a rapidly growing closet of brands. Under Liz Claiborne's multi-channel distribution strategy, the brands are available at over 30,000 different retail locations throughout the world.[8]
  • Liz Claiborne Inc. said may sell up to 16 of its brands and thin its executive ranks as part of a sweeping corporate overhaul. "Our strategy is centered on building powerful brands. With a newly focused portfolio, realigned structure and strengthened management team, we can commit the resources and marketing investment necessary to maximize the potential of our most valuable properties," Chief Executive William McComb said in a statement. The news comes as Liz Claiborne and other apparel companies have grappled with widespread department store consolidation and a quickly changing retail industry. The strategy of holding a varied portfolio of brands that can withstand changing fashion trends and economic cycles has been popular with apparel companies including Liz Claiborne Jones Apparel Group Inc. and VF Corp. But companies have recently looked to streamline their operations. The 16 brands out of its nearly 40 holdings that Claiborne will try to sell, license out or possibly discontinue are C&C California, Dana Buchman, Ellen Tracy, Emma James, Enyce, First Issue, Intuitions, J.H. Collectibles, Kensie, Laundry by Design, Mac & Jac, prAna, Sigrid Olsen, Stamp 10, Tapemeasure and Tint.[9]

Political and Public Influence

Political Contributions

Lobbying

Corporate Accountability

Co-Op America Summary: Liz Claiborne strives to enhance its customers' beauty through its fragrances, acessories and clothing. But the company has been involved in a series of of sweatshop lawsuits and questionable ethical practices which dampen the image of beauty that Liz Claiborne tries to project. The company has refused to change the name of the Crazy Horse line of products, despite protests from Native Americans who say the name is offensive to them. Additionally, the Human Rights Campaign has given Liz Claiborne poor marks for its company policies regarding sexual orientation. Liz Claiborne has taken some leadership against domestic violence and donated $1 million to relief following the September 11th attacks. But with a CEO making $12 million a year, and continued concerns about labor standards across their supply chain Liz Claiborne's commitments to people appear to be no more than cosmetic. Bottom line: Tell Liz Claiborne it's time to devote resources to paying garment workers a living wage. Visit Go Green for sustainable alternatives.

Labor

Layoffs:

Unions:

  • In the United States and Canada, we are bound by collective bargaining agreements with UNITE HERE (which was previously known as the Union of Needletrades, Industrial and Textile Employees, prior to its merger with the Hotel Employees and Restaurant Employees International Union) and with related locals. Most of the UNITE HERE represented employees are employed in warehouse and distribution facilities we operate in California, New Jersey, Ohio, Pennsylvania and Rhode Island. The agreements with UNITE HERE expire in May 2009, other than the local agreements covering employees at our Allentown, Pennsylvania and Cincinnati, Ohio facilities, which expire in March 2008 and June 2008, respectively. Collectively, these agreements cover approximately 1,635 of our full-time employees. While relations between the Company and the union have historically been amicable, the Company cannot rule out the possibility of a labor dispute at one or more of its facilities. In addition, we are bound by an agreement with the Industrial Professional & Technical Workers International Union, covering approximately 210 of our full-time employees at our Santa Fe Springs, California facility and expiring on May 14, 2010.[10]
  • National collective bargaining agreement with UNITE HERE is Exhibit 10(c) in 10K filed 02/28/07

Occupational safety and health:

  • Between 07/11/2002 and 07/11/2007, OSHA inspections identified 9 violations by Liz Claiborne establishments[11]


Global

History:

  • 1994 First adopted code of conduct
  • 1999 Independent monitoring pilot project in Guatemala with COVERCO

Policy:

  • "We expect all of our suppliers to adhere to the Liz Claiborne Standards of Engagement[1], which include standards relating to child labor, working hours, wage payments and working conditions generally. We have an ongoing program in place to monitor our suppliersí compliance with our Standards. In this regard, each year, our internal or external monitors inspect a substantial portion of our suppliersí factories. Should we learn of a supplierís failure to comply with our Standards, we urge supplier to act quickly in order to comply. If a supplier fails to correct a compliance deficiency, or if we determine that the supplier will be unable to correct a deficiency, we may terminate our business relationship with the supplier. In addition, we are a participating company in the Fair Labor Associationís program. The Fair Labor Association is a non-profit organization dedicated to improving working conditions worldwide. Our human rights compliance program was accredited by the Fair Labor Association in May 2005. This accreditation must be renewed every three years." [12]

Campaigns against company:

  • 1999: five attempts to organize a union at Doall factory in El Salvador were crushed through mass illegal firings. Liz Claiborne company has been sewing garments at the Korean-owned Doall factories in El Salvador since 1992. The women earn just 74 cents for every $198 Liz Claiborne jacket they sew, and 58 cents for every $118 pair of pants. Their wages amount to less than one-half of one percent of the retail price of the clothing. USAS and the National Labor Committee reported these violations to the company, which sent PriceWaterhouseCoopers to investigate. The auditors found no violations. A letter-writing campaign ensued, urging Liz Claiborne to reinstate fired workers, undertake independent verification, end worker abuses and disclose names of all its contractors. [2]
  • 2001: the two unions at the Choishin and Cimatextiles factories in Guatemala, owned by a Korean-based company called Choi & Shin's, went public on July 9, 2001. Both factories produce for Liz Claiborne and are located in Villa Neuva, just outside Guatemala City, Guatemala. Union supporters reportedly began to face death threats, threats to close the factory, blackmail, the calling of meetings during work hours to denounce the union, and the stoning of the workers' meeting place while meetings are taking place. These events escalated and on Wednesday, July 18th, the union supporters were attacked by a mob of non-union workers. The mob seemed to be orchestrated by the factory management, which motivated the non-union workers with threats that the factory will close and that the workers will be blacklisted and never get work again. US/LEAP organized a pressure campaign, urging Liz Claiborne to intervene and also initiated a letter-writing campaign aimed at the company and at the Guatemalan government.[3]
  • 2004: National Labor Committee includes Liz Claiborne in a campaign against forty companies producing in Bangladesh. The goal is for firms to pledge to abide by legal labor protections for pregnant women. Liz Claiborne signed the pledge. [4]

Major reports:

  1. Human Rights Watch, Guatemala Discrimination Against Women Workers 2002[15]
  1. Hong Kong Christian Industrial Committee, China Women Workers in Special Economic Zones 2004[16]
  1. Maquila Solidarity Network, Transparency Report Card 2006[17]
  1. National Labor Committee, US-Jordan Free Trade Agreement 2006[18]

Human Rights

Human Rights Watch, Guatemala Discrimination Against Women Workers 2002[19]

Environment

Human Rights Watch, Guatemala Discrimination Against Women Workers 2002[20]

Consumer Protection and Product Safety

Anti-Trust and Tax Practices

Social Responsibility Initiatives

  • In 1992, Liz Claiborne started an initiative called Love is Not Abuse which seeks to educate about domestic violence.[21]
  • Liz Claiborne Foundation supports organizations in U.S. communities in the vicinity of the company's facilities.[22]

Business Scope

Lines of Business and Major Products Paragraph

Units/Subsidiaries


Liz Claiborne, Inc., operates the following business segments: Wholesale Apparel, Wholesale Non-Apparel and Retail. We also license to third parties the right to produce and market products bearing certain Company-owned trademarks.

Units/subsidiaries

In addition, see brands below; for full list of subsidiaries see Exhibit 21 of 10K filed 02/28/07.

Brands

  • Axcess
  • Bora Bora
  • C & C California
  • Claiborne
  • Concepts by Claiborne
  • Curve
  • Dana Buchman
  • Elisabeth
  • Ellen Tracy
  • Emma James
  • Enyce
  • First Issue
  • Intuitions
  • J.H. Collectibles
  • Juicy Couture
  • Kate Spade
  • Kenzie
  • Kenziegirl
  • Laundry by Shelli Segal
  • LIZ
  • Liz & Co.
  • Liz Claiborne
  • Lucky Brand Jeans
  • Mac & Jac
  • Mambo
  • Marvella
  • Mexx
  • Monet
  • Monet 2
  • Prana
  • Realities
  • Sigrid Olsen
  • Soul
  • Spark
  • Stamp 10
  • Tapemeasure
  • Tint
  • Trifari
  • Villager
  • Yzza
  • Liz Claiborne Inc. holds the exclusive, long-term license to produce and sell men's and women's collections of DKNYÆ Jeans and DKNYÆ Active in the Western Hemisphere
  • The Company also has the exclusive license to produce jewelry under the Kenneth Cole New York and Reaction Kenneth Cole brand names.[23]

Suppliers

  • Products produced in Asia represent a substantial majority of the Company's sales. "We also source product in the United States and other regions. During 2006, several hundred suppliers, located in approximately 52 countries, manufactured our products,with the largest finished good supplier accounting for approximately 4% of the total of finished goods we purchased. We continually seek additional qualified suppliers throughout the world for our sourcing needs and seek to allocate our production requirements to suppliers appearing to have superior capacity, quality (of product, operation and human rights compliance) and financial resources. Our purchases from our suppliers are processed utilizing individual purchase orders specifying price and quantity of the items to be produced. We do not have any long-term formal arrangements with any of the suppliers that manufacture our products. We believe we are the largest customer of many of our manufacturing suppliers and consider our relations with such suppliers to be satisfactory."[24]
  • "Our largest supplier of finished products manufactured approximately 5% of our purchases of finished products during 2004. In each of 2004, 2003 and 2002, our ten largest suppliers for the year manufactured in aggregate approximately 33%, 35% and 35%, respectively, of our purchases of finished products."[25]

Identified suppliers:

Customers Suppliers Creditors[31] Competitors
Major Department Stores Gelmart Industries Inc. Bank of America Jones Apparel Group, Inc.
The Levy Group, Inc. Citibank Polo Ralph Lauren Corporation
Mithat Giyim ve Ticaret AS Suntrust Bank Esprit
Perry Mfg. Co. Wachovia Bank Benetton Group
Tama Mfg. Co., Inc. JP Morgan Chase Bank Zara
Next

Financial Information

Ticker Symbol: LIZ (common)

Main Exchanges: NYSE

Investor Website: Liz Claiborne Investor Relations Overview

Shareholder % Total Shares held
Fidelity Management & Research Corporation 13.83%
Lazard Asset Management LLC 7.50%
Amvescap Plc 7.24%
AXA 4.42%
Vanguard Group, Inc. 4.04%

Largest ShareholdersFrom Yahoo Finance profile

Governance

Executives

William L. McComb (Chief Executive Officer), Michael Scarpa (Chief Operating Officer), Jill Granoff (Executive Vice President, Direct Brands), Tim Gunn (Chief Creative Officer), Lawrence D. McClure (Senior Vice President, Human Resources), Roberta Schuhalter Karp (Senior Vice President, Business Development and Legal/Corporate Affairs), Nick Rubino (Vice President, General Counsel and Corporate Secretary), Robert Vill (Vice President, Finance and Treasurer), Elaine H. Goodell (Vice President, Corporate Controller & Chief Accounting Office)

Board members & affiliations

Executive/director compensation

Contact Information

1441 Broadway
New York, NY 10018
U.S.A.
Tel:1-212-354-4900
Fax:1-212-626-1800
Website: http://www.lizclaiborneinc.com

Articles and Resources

Books on the Company

  • Collins, Jane L. 2003. Threads: Gender, Labor, and Power in the Global Apparel Industry. Chicago: University of Chicago Press.
  • Brands, H.W. 1999."Chapter 21: Dress for Success-Liz Claiborne" in Masters of Enterprise: Giants of American Business from John Jacop Astor and J.P. Morgan to Bill Gates and Oprah Winfrey.Free Press.
  • Landrum, Gene N. 1994.Profiles of Female Genius: Thirteen Creative Women who Changed the World. Amherst, NY: Prometheus Books.

Related SourceWatch Articles

Related SourceWatch articles

Sources

  1. Liz Claiborne 10K filed 02/28/07
  2. Liz Claiborne 10K filed 02/28/07
  3. Liz Claiborne 10-K filed 02/28/07
  4. Liz Claiborne: Our Company History
  5. Fortune 500 2007: Liz Claiborne, Fortune (via CNN Money).
  6. Fortune 500 2007: Liz Claiborne, Fortune (via CNN Money).
  7. Michael D. Cole, "The Apparel Top 50: A Rising Tide," Apparel Magazine, July 1, 2005.
  8. Hoover's
  9. Angela Moore, E18%2DD419%2D44C5%2DAB5B%2D08BFE3A9DD81%7D&siteid=yhoof "Liz Claiborne to review brands, cut jobs," MarketWatch, July 11, 2007.
  10. Liz Claiborne 10-K filed 02/28/07
  11. Occupational Safety & Health Administration, ate=All&officetype=All&Office=All&p_case=closed&endmonth=07&endday=11&endyear=2002&startmont h=07&startday=11&startyear=2007 Liz Claiborne OSHA Inspections, Department of Labor.
  12. Liz Claiborne 10-K filed 02/28/07
  13. http://www.hrw.org/wr2k/Issues-03.htm
  14. http://www.cleanclothes.org/news/01-01-02.htm
  15. Guatemala: Women and Girls Face Job Discrimination, Human Rights Watch, February 12, 2002.
  16. Conditions of Women Workers in Special Economic Zones and Labour Standards in Supplier Factories of German Garment Retailer Companies and Brands in China, Hong Kong Christian Industrial Committee, September 16, 2004.
  17. Revealing Clothing: 2006 Transparency Report Card, Maquila Solidarity Network, December 7, 2006.
  18. U.S.-Jordan Free Trade Agreement Descends into Human Trafficking and Involuntary Servitude, National Labor Committee, May 2006.
  19. Guatemala: Women and Girls Face Job Discrimination, Human Rights Watch, February 12, 2002.
  20. Guatemala: Women and Girls Face Job Discrimination, Human Rights Watch, February 12, 2002.
  21. Love is Not Abuse
  22. The Liz Claiborne Foundation
  23. Liz Claiborne: Our Company Overview
  24. Liz Claiborne 10K filed 02/28/07
  25. Liz Claiborne: Our Company Overview
  26. Gelmart Industries
  27. The Levy Group: The Name Behind the Great Names in American Fashion
  28. http://zeyak.com/zeyak_sourcing.htm
  29. Larry Luxner, "El Salvador Est· Disfrutando su Exito," Luxner News Inc, November 1995.
  30. Tama Mfg. Co.: Clients
  31. Liz Claiborne 10K filed 02/28/07, Five-Year Credit Agreement, dated as of October 13, 2004
  32. Profile: Liz Claiborne Inc. (LIZ), Yahoo Finance.


External Resources

  • Collins, Jane L. 2003. Threads: Gender, Labor, and Power in the Global Apparel Industry. Chicago: University of Chicago Press.
  • Brands, H.W. 1999."Chapter 21: Dress for Success-Liz Claiborne" in Masters of Enterprise: Giants of American Business from John Jacop Astor and J.P. Morgan to Bill Gates and Oprah Winfrey.Free Press.
  • Landrum, Gene N. 1994.Profiles of Female Genius: Thirteen Creative Women who Changed the World. Amherst, NY: Prometheus Books.

External Articles

  • Michael D. Cole, "The Apparel Top 50: A Rising Tide," Apparel Magazine, July 1, 2005.