The Liz Claiborne line has sold well at J.C. Penney. The same cannot be said for its performance at Macy's. That's why the apparel manufacturer felt secure in making a deal to exclusively sell the Claiborne brand through Penney's stores and website. While Claiborne will be responsible for the design of its line, Penney will take over manufacturing of the brand.
Bill McComb, Claiborne's CEO, called Penney, "The perfect partner to steward this brand properly and profitably, given their financial wherewithal and their many strengths, including brand management, multi-channel distribution and operations."
The deal with Penney also brings to an end Claiborne's relationship with Macy's. Jim Sluzewsk, a spokesperson for the department store chain, told Dow Jones Newswires that the Claiborne brand "has sold poorly in recent years and has continued to decline. As a result, we could not justify expanding it."
Mr. Sluzewski said the chain's customers had become "confused between various brands carrying the Liz name, and the management of Liz Claiborne needed to take corrective action."
Claiborne will continue to sell its Claiborne New York line brand through QVC.
Discussion Questions: What do you think of Liz Claiborne's exclusive deal with J.C. Penney? What will each party need to do if the deal is to be mutually beneficial?