Juicy Couture is not the only chain the company is expanding. This year Liz Claiborne will open 20 Lucky Brand jeans stores (it now has 90) and the same amount of its Sigrid Olsen clothing chain, which currently operates 25. Mexx, the company's European clothing chain will add five units bringing its US total to 12. Across all of its brands, Liz Claiborne has 269 domestic specialty retail stores, 285 outlet units and 622 international stores, most of them Mexx.
Retail stores in 2004 accounted for 23% of the company's $4.6 billion in net sales, and company executives expect that number to increase to 25% this year. Last year's same-store sales company-wide increased 3% from the year before. Specialty retail stores jumped 10.5%, but outlets dropped 1.6%.
Liz Claiborne executives are forecasting a 6% to 8% increase in net sales this year and EPS between $2.96 and $3.02, up from $2.85 in 2004.
Paul Charron, Liz Claiborne's chairman and CEO, weighed in on Federated Department Stores' proposed $11 billion acquisition of May Department Stores. "We feel that Federated's approach provides a real chance to reverse the long, slow decline of this sector," he said. The deal could help Liz Claiborne's wholesale business because May stores do not carry as much of the company's apparel as Federated's, and the merger could lead to a boost in sales, Charron said.
However, the company's retail-store expansion is in some ways a response to department stores' performance in general, he said. "We have shifted away from American department stores as their share has declined."
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