Today marks the three year anniversary for CEO Bill McComb at Liz Claiborne, but does the headline-heavy exec have much to celebrate? McComb took over the struggling Liz Claiborne label in 2006 with high hopes and high expectations from industry critics. He was pegged as an innovator and solid business presence, having built a reputation as a head executive at Johnson & Johnson. But McComb's first controversial move came in 2007 when he shut down more than a dozen department store brands, wiping out more than $800 million of the company's total revenue. In what seemed a wise business plan, McComb then hired on well known designers Isaac Mizrahi and Narciso Rodriguez to design for the label. But the partnership went sour when the products didn't sell as promised, leaving the designers wondering if the company was in capable hands. Mizrahi had left a $6 million contract with Target to join Liz Claiborne.
Now that McComb's three year anniversary with company is here, critics are starting to wonder if he's done more harm than good. Liz reported yesterday a widened quarterly loss on a 24 percent revenue drop,
shares having fallen 3.3 percent to $5.30 — 87 percent below their price when
McComb became CEO.But McComb swears the company's pitfalls are not his fault, and that he's been working to increase the company's business since he began. "I inherited a terrible balance sheet and a huge portfolio of sub-scale
businesses," McComb told The New York Post. "We shed businesses that were losing
money." But instead of properly marketing the businesses that were left—including Juicy Couture, Lucky Brand jeans and Kate Spade—McComb chose to throw funds onto overblown ventures like hiring the high end designers Mizrahi and Rodriguez, and starting 12 distribution centers— a superfluous amount considering the company's rival, Jone Apparel, only has 3. "I don't believe Liz had the infrastructure to handle these acquisitions," said Gilbert Harrison of Financo, a New York-based investment bank.
So now as the company looks forward, industry officials are hoping that McComb is able to lick his wounds and fess up to the fact that his ventures may have been cause of the dramatic revenue drop, and to start making moves to rectify the situation. The CEO has already admitted that his plan to hire Rodriguez, "could have been better thought out." As with Mizrahi, "The deal with Isaac did not work out like we hoped," McComb said. "Still, I'm thrilled that we did it." He added that he was optimistic about the upcoming holiday season and the company's plans for 2010. "The story isn't over," he claimed, and for his sake, we hope not.
Article Source: The New York Post
Photo Source: daylife.com