For Liz Claiborne, will new name bring better luck?

The fashion house bets on high-end consumers.

By Jonathan Berr Jan 4, 2012 10:55AM
Tim Pannell/CorbisWhen Liz Claiborne (LIZ) sold its namesake brand to J.C. Penney (JCP) late last year for $288 million, it became obvious that a name change was in order. The company indeed announced Wednesday that starting in May it would become Fifth and Pacific Companies, trading under a new ticker FNP.

The name reflects New York (Fifth Avenue) and Pacific (The Pacific Ocean). A new name is needed because the company is new and needs to create a new brand identity.  Fifth and Pacific is not a bad corporate name, but it doesn't obscure the challenges that lie ahead for the fashion house.

Liz Claiborne hasn't had an annual profit since 2006. This year will be no exception. Analysts expect the company to lose 3 cents per share in the current quarter and for revenue to plunge more than 33% to $471.13 million. In response to the changing marketplace, Liz Claiborne is focusing on brands that appeal to wealthy consumers -- think $248 handbags -- such as Juicy Couture, Kate Spade and Lucky Brand. Marketing exclusive brands dovetails nicely with the strategies of high-end department store chains such as Macy's (M).

Post continues below.

In a press release, CEO William L. McComb bragged about the company's "high-growth retail-based brands with significant expansion potential in global markets, spanning multiple product categories. In short, ours is a momentum portfolio, poised for growth and global expansion."

Wall Street has faith that McComb will be able to turn the company around. The average 52-week price target for the stock is $9.20, about a 7% upside to where it currently trades. If the economic rebound continues as expected, it appears as though investors' faith will be well-rewarded.

Jonathan Berr is a freelance business writer and does not own shares of the companies listed here.
Tags: JCPM
29Comments
Jan 4, 2012 3:51PM
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I don't think it really matters, whenever I shop at JC Penney's or any other store for that matter, I am thoroughly disgusted at the cheapness, poorly sewn and low quality of material of which the clothes are made.   I refuse to buy them at any price.  I almost ordered about a dozen Liz Claiborne tops online last year, (which use to be my favorite line at Rich's - Macy stores when Liz was alive),  I went in to JC Penney's to see the shirts on the racks first, glad I did, very flimsy and cheap, would have sent them all back.  I have stopped caring about clothes if this is the can of goods the American Manufacturers overseas are selling us!  BRING BACK MADE IN THE USA!!!
Jan 4, 2012 3:22PM
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Macys is considered a high-end department store?  LOL-good luck finding anything not Made in China and that lasts longer than one washing-including Ralph Lauren.  Anything advertised to mainstream America is crap because the majority of Americans do not know what quality is anymore and certainly don't want to pay for it unless it's crap packaged and hyped as the latest gimmick/fad.
Jan 4, 2012 3:11PM
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Liz Claiborne is not the same Liz Claiborne of many years ago---the clothing line was equal to Ralph Lauren----the actual Liz Claiborne sold her business many years ago.

 

Now the clothing is made for Penney's, and Wal Mart---Junk., and high prices.

 

It's in all the Factory Outlets---

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What sort of image does "Fifth ad Pacific" conjure?  One could equate Liz Claiborne with fashion,  this reminds me of real estate and beaches (maybe).  I predict this will become one of the biggest branding mistakes of 2012.
Jan 4, 2012 2:07PM
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If it's going to change the name, what exactly did JC Penny buy for its $288 million? A Rolodex? Jonathan Berr seems to be a big fan of the new strategy of providing brands that appeal to its wealthy customers. Hey Jonathan, what wealthy customers? People who shop at Penny's are not wealthy and will never be wealthy. I'd say that Penny's is a good stock to short. There are enough low-tier retailers who are doing a much better job.
Jan 4, 2012 4:01PM
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If it's made in China, it is CRAP!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Jan 4, 2012 4:35PM
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Liz Claiborne was my go to brand. The styles were current and respectable. There was a quality you could depend on. You cannot find that now. The fabric is especially poor and the sizes are so difficult to fit. I don't believe a name change will help. Cheap is cheap!
Jan 4, 2012 3:31PM
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OK, let's see....Fashion and JC Penney.. hmmmmm....somehow does not compute to my way of thinking.  Penney's is like Sears (and KMart) to me...low quality, old tired stores to display the cheap china made merchandise.  This new name sounds like a shipping company or a railroad - Fifth and Pacific....who even thought for a minute that would be a name to associate with Fashion!!  I think not.  Someone made a big Boo-Boo- in my opinion.....  which just proves my point...... fashion? ....even the marketing people could not come up with a name....  I don't see any future here... 
Jan 4, 2012 3:21PM
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It seems a good idea, but be cautioned....

 

As an old marketer of too many years, well, changing a recognized brand name can be a fatal mistake; marketing suicide.

 

But good luck, regardless.Martini glass

Jan 4, 2012 3:13PM
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Fifth & Pacific???  It sounds like an obscure shipping company, not a clothing brand.  Where do these people come up with these strange ideas & do they not market-test them first? 

There are many issues with this. 

For starters, would you associate "Fifth & Pacific" with clothing?  I wouldn't.  Changing the name needn't be a bad thing but heck, it really should relate to the product.

Secondly, the name should be pronounceable.  "Fifth & Pacific" is too much of a tongue-twister to be successful on any level.

And thirdly, as Urbanman said, just how many wealthy people do they think shop at JC Penney??Most people in our area who shop there do so because they are looking for bargains & there is almost always a sale or clearance rack(s) to shop from.

Jan 4, 2012 4:43PM
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There is a web site called Made in USA.com it's one way to make sure you get actual made in America goods because they list the names..Good luck all!
Jan 4, 2012 3:35PM
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People are confusing Liz Claiborne the soon-to-be renamed company with Liz Claiborne the licensed brand name, hence the reason for the name change.  They no longer want to be associated with the tainted JC Penney name or their often poorly-constructed offerings.  I do agree that the new corporate name is awkward and does not connote higher-end fashion, and I fear their Juicy and Lucky brands are on the decline as well. I'd say a corporate revamp is in order.
Jan 4, 2012 5:43PM
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Ummm, lets see why is Liz Claiborne no longer turning a profit???  Well..... have you looked at the clothing, shoes or handbags lately?  There was a time when she was one of the best and then well - they are selling clothing at J C Penney - that about says it all doesn't it?  Even the outlet store line is horribly designed and way overpriced for the quality.  Change the name but if you don't change anything else a new name is not going change the profit margin.
Jan 4, 2012 4:32PM
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So basically, JC Penney has just been trading in on the Liz Claiborne name, and overpricing the merchandise accordingly.  Won't be going with that brand anymore or the new name.
Jan 4, 2012 4:36PM
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It's still the overpriced chinese sweatshop junk who cares buy a knockoff and save a lot on money.

Jan 4, 2012 5:13PM
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i use to work for liz claiborne here in ohio,but they now are close down,but i don't care what name change that they do,they put these young know it all's incharge,that don't know how to talk to the worker's are treat them, as you can see this new CEO  has said they will make liz claiborne for the wealthy,now ain't that something, like poor people don't like to dress, if you want it to sell you better make it for everyone,cause to be for real liz claiborne is not all of that, maybe at one time but not know more.LOL
Jan 4, 2012 5:33PM
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Many comments about cheap chinese made clothing.  How many of you look to see where your clothing is made?  Most is in Southeast Asia or Central or South America, even the expensive stuff.  Until we are ready to spend more for a clothing item and demand that it be made in the US, we will have cheap clothing.  At this time, most will not pay $25 for a T shirt they can get for $5 at Wal-Mart.
Jan 4, 2012 5:18PM
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Maybe it should be 5th of Gin.......Somebody was drinkin' to come up with that name.
Jan 4, 2012 6:18PM
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Well, another name brand goes by the wayside and on to China. Name brands do not mean anything anymore if they are made in China. I know how it feels when you find out that a name you counted on has been sold out. Vera Bradley is another one. When I got my first purse from Vera it was great and the thing I liked about it was they were made here, in the good ole USA. Then I lost my job and and had to give up the expense of her purses. About 2 years ago I started working again and was able to buy some of her items. I bought 2 of them this past fall, only to find out in December that in 2008 (approx) Vera Bradley closed her plants here and took her business to CHINA. Lots and lots of people lost their jobs after working for years at the factories. And the quality has dropped. And you would think if she went to China for the cheaper labor, she could lower her prices a little but oh no, they have instead gone up. The companies that are doing this will sooner or later run into problems because of the quality of the items. Now I am going to look at the list I saw in one of these messages and go to the website to find another company that makes their products here.

Jan 4, 2012 4:07PM
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5th & Pacific?    Sounds like wild west bronco busting gear!  

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