exv99w1
Exhibit 99.1
Liz Claiborne, Inc. Releases February Direct to Consumer Comparable Sales and
Provides First Quarter 2011 Adjusted EBITDA Projection
NEW YORK March 28, 2011 Liz Claiborne, Inc. (NYSE: LIZ) (the Company) today announced
February direct to consumer comparable sales and provided projections for 2011 first quarter
Adjusted EBITDA.
February direct to consumer comparable sales performed as follows:
|
|
|
|
|
Brand |
|
February |
Juicy Couture |
|
|
(5 |
%) |
Lucky Brand |
|
|
12 |
% |
kate spade |
|
|
87 |
% |
Mexx Europe |
|
|
(8 |
%) |
Mexx Canada |
|
|
(3 |
%) |
Based on the financial information available to the Company and the Companys most current
projections, the Company expects that its Adjusted EBITDA, excluding foreign currency gains
(losses), net for the first quarter of 2011 will be approximately $(11) million to $(17) million.
The Companys 2011 first quarter has not yet been completed, and the quarter-end closing process is
not expected to be completed until a number of weeks after the end of the quarter, so the Companys
expectations are subject to that closing process, as well as the factors discussed under
Forward-Looking Statements below.
The Companys previously-released guidance for Adjusted EBITDA is unchanged. The Companys full
year 2011 Adjusted EBITDA is dependent on the Companys financial results in the second half of
2011 and on other factors, including those discussed under Forward-Looking Statements below.
Also, as a result of the Companys recently announced tender offer and related financing
scheduling, the Company will be rescheduling its Investor Day from Thursday, March 31, 2011 to
Thursday, April 28, 2011. The Company will provide more details around the rescheduled event as
soon as possible.
About Liz Claiborne, Inc.
Liz Claiborne, Inc. designs and markets a global portfolio of retail-based premium brands including
Juicy Couture, kate spade, Lucky Brand and Mexx. The Company also has a refined group of department
store-based brands with strong consumer franchises including the Monet family of brands, Kensie,
Kensiegirl, Mac & Jac, and the licensed DKNY® Jeans and DKNY® Active brands. The Liz Claiborne and
Claiborne brands are available at JCPenney, the Liz Claiborne New York brand designed by Isaac
Mizrahi is
available at QVC, and the Dana Buchman and Axcess brands are sold at Kohls. Visit
www.lizclaiborneinc.com for more information.
Forward-Looking Statements
Statements contained herein that relate to the Companys future performance, financial condition,
liquidity or business or any future event or action are forward-looking statements under the
Private Securities Litigation Reform Act of 1995. Such statements are indicated by words or phrases
such as intend, anticipate, plan, estimate, target, forecast, project, expect,
believe, we are optimistic that we can, current visibility indicates that we forecast or
currently envisions and similar phrases. Such statements are based on current expectations only,
are not guarantees of future performance, and are subject to certain risks, uncertainties and
assumptions. The Company may change its intentions, belief or expectations at any time and without
notice, based upon any change in the Companys assumptions or otherwise. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual
results may vary materially from those anticipated, estimated or projected. In addition, some risks
and uncertainties involve factors beyond the Companys control. Among the risks and uncertainties
are the following: our ability to continue to have the necessary liquidity, through cash flows from
operations, and availability under our amended and restated revolving credit facility may be
adversely impacted by a number of factors, including the level of our operating cash flows, our
ability to maintain established levels of availability under, and to comply with the financial and
other covenants included in, our amended and restated revolving credit facility and the borrowing
base requirement in our amended and restated revolving credit facility that limits the amount of
borrowings we may make based on a formula of, among other things, eligible accounts receivable and
inventory; the minimum availability covenant in our amended and restated revolving credit facility
that requires us to maintain availability in excess of an agreed upon level and whether holders of
our Convertible Notes issued in June 2009 will, if and when such notes are convertible, elect to
convert a substantial portion of such notes, the par value of which we must currently settle in
cash; general economic conditions in the United States, Europe and other parts of the world; lower
levels of consumer confidence, consumer spending and purchases of discretionary items, including
fashion apparel and related products, such as ours; continued restrictions in the credit and
capital markets, which would impair our ability to access additional sources of liquidity, if
needed; changes in the cost of raw materials, labor, advertising and transportation, including the
impact such changes may have on the pricing of our product and the resulting impact on consumer
acceptance of our products at higher price points; our dependence on a limited number of large US
department store customers, and the risk of consolidations, restructurings, bankruptcies and other
ownership changes in the retail industry and financial difficulties at our larger department store
customers; our ability to effect a turnaround of our Mexx Europe business; our ability to
successfully re-launch our Lucky Brand product offering; our ability to successfully implement our
long-term strategic plans; risks associated with the licensing arrangements with J.C. Penney
Corporation, Inc. and J.C. Penney Company, Inc. and with QVC, Inc., including, without limitation,
our ability to efficiently change our operational model and infrastructure as a result of such
licensing arrangements, our ability to continue a good working relationship
with these licensees and possible changes or disputes in our other brand relationships or
relationships with other retailers and existing licensees as a result; our ability to anticipate
and respond to constantly changing consumer demands and tastes and fashion trends across multiple
brands, product lines, shopping channels and geographies; our ability to attract and retain
talented, highly qualified executives, and maintain satisfactory relationships with our employees,
both union and non-union; possible exposure to multiemployer union pension plan liability as a
result of current market conditions and possible withdrawal liabilities; our ability to adequately
establish, defend and protect our trademarks and other proprietary rights; our ability to
successfully develop or acquire new product lines or enter new markets or product categories, and
risks related to such new lines, markets or categories; the impact of the highly competitive nature
of the markets within which we operate, both within the US and abroad; our reliance on independent
foreign manufacturers, including the risk of their failure to comply with safety standards or our
policies regarding labor practices; risks associated with our agreement with Li & Fung Limited,
which results in a single foreign buying/sourcing agent for a significant portion of our products;
a variety of legal, regulatory, political and economic factors that can impact our operations and
results and the shopping and spending patterns of consumers, including risks related to the
importation and exportation of product, tariffs and other trade barriers, to which our
international operations are subject; our ability to adapt to and compete effectively in the
current quota environment in which general quota has expired on apparel products but political
activity seeking to re-impose quota has been initiated or threatened; our exposure to domestic and
foreign currency fluctuations; risks associated with material disruptions in our information
technology systems; risks associated with privacy breaches; limitations on our ability to utilize
all or a portion of our US deferred tax assets if we experience an ownership change; the outcome
of current and future litigations and other proceedings in which we are involved; and such other
factors as are set forth in the Companys 2010 Annual Report on Form 10-K, filed on February 17,
2011 with the Securities and Exchange Commission, including in the section entitled Item 1A- Risk
Factors. The Company undertakes no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.
The Companys targets for adjusted EBITDA for 2011 are subject to a number of assumptions and
estimates with respect to comparable store sales and store traffic, competition, gross margins,
economic conditions, expected customer reaction to the Companys styles, wholesale orders, weather
conditions, promotional activities and a number of other assumptions and estimates that are beyond
the Companys control. If actual conditions differ from those assumptions and estimates, the
Companys actual results could differ materially from those expected. The Companys actual results
may differ from expectations because of a number of factors listed in the previous paragraph and in
Item 1A, Risk Factors, in the Companys Annual Report on Form 10-K for the year ended January 1,
2011.
Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA, excluding foreign currency gains (losses), net are non-GAAP
financial measures. The Company defines EBITDA as income (loss) from continuing operations
attributable to Liz Claiborne, Inc., adjusted to exclude income tax provision (benefit), interest
expense, net and depreciation and amortization. The Company calculates Adjusted EBITDA based on
EBITDA, adjusted to exclude the impact of expenses incurred in connection with the Companys
streamlining initiatives and brand-exiting activities, non-cash impairment charges and non-cash
share-based compensation expense. The Company calculates Adjusted EBITDA, excluding foreign
currency gains (losses), net based on Adjusted EBITDA, further adjusted to exclude foreign currency
gains (losses), net. The Company presents Adjusted EBITDA as a supplemental measure of the
Companys performance because the Company believes it represents a more meaningful presentation of
the Companys historical operations and financial performance without the impact of the various
items excluded, since Adjusted EBITDA provides period-to-period comparisons that are consistent and
more easily understood. The Company presents Adjusted EBITDA, excluding foreign currency gains
(losses), net in order to present the Companys operating performance excluding the effects of
unrealized foreign currency gains (losses) included in the Companys Consolidated Statements of
Operations.