Oct. 8, 2009 (PR Newswire) -- NEW YORK, Oct. 8 /PRNewswire-FirstCall/ -- Liz Claiborne Inc. (NYSE: LIZ) today announced bold steps to further the revitalization of the Liz Claiborne brand franchise and to significantly alter its earnings trajectory. To accomplish this, the company has entered into a long-term licensing agreement with J. C. Penney Company, Inc. (NYSE: JCP), under which JCPenney will become the exclusive department store destination for all Liz Claiborne and Claiborne branded merchandise in the United States and Puerto Rico. The other important element of this strategy is moving the distribution of the Liz Claiborne New York brand designed by Isaac Mizrahi to QVC. As a result of these agreements, the company expects the Liz Claiborne wholesale brand franchise to swing from a meaningful adjusted operating loss in 2009 to a targeted adjusted operating profit in 2010.

Liz Claiborne and Claiborne Brands Exclusive to JCPenney

The Liz&Co. and Concepts by Claiborne brands, launched at JCPenney in 2007, have consistently been among JCPenney's strongest exclusive brand performers, reflecting the enormous appeal of the Liz Claiborne brand to the JCPenney customer. This milestone, strategic agreement substantially expands this highly successful partnership by launching full lifestyle collections under both the Liz Claiborne and Claiborne brand names, available in JCPenney stores, catalog and on jcp.com beginning in Fall 2010.

With this agreement, all Liz Claiborne merchandise at JCPenney - which will include approximately 30 merchandise categories - will now be sold in JCPenney's highly affordable better/best pricing category. Liz Claiborne Inc. will lead the design process, JCPenney will be responsible for sourcing, production, marketing and distribution and they will together merchandise the brand.

Additional highlights of the JCPenney agreement include:

    --  The agreement has a term of up to 10 years beginning in August 2010. At
the end of year five, after certain consents have been obtained,
JCPenney will have the option to acquire the licensed trademarks and
other Liz Claiborne brands for use in the U.S. and Puerto Rico.
JCPenney will also have the option to take ownership of the marks in the
same territory at the end of year 10.

    --  Liz Claiborne Inc. will receive design service fees and royalties as a
percent of sales plus gross profit sharing with guaranteed minimums.

    --  The merchandise will be sourced by JCPenney's well established sourcing
organization to leverage a long history of supplier relationships and
leading edge, proprietary technology and processes.

    --  The launch of Liz Claiborne and Claiborne will include a full range of
apparel for women and men, as well as accessories, shoes and home.

    --  Liz Claiborne Inc. retains the rights to market and distribute the Liz
Claiborne, Liz & Co., Claiborne and Concepts by Claiborne labels outside
of the U.S.

Commenting on the JCPenney strategic partnership, Liz Claiborne Inc. chief executive officer William L. McComb said: "There are few brands, across the American landscape, with the history, cultural significance, and consumer credentials as the Liz Claiborne brand. Today, we've taken bold steps that honor this amazing heritage. After two very successful years partnering with JCPenney, we decided it was time to take it to the next level. The commitment, the connection to the consumer and the brand stewardship JCPenney has brought to the table have been nothing short of outstanding. I have often talked about the need for strategies that allow companies to 'win with the winners' and this strategic alliance with JCPenney turns those words into action. By simplifying our model and working with them as our exclusive department store partner, we can reach the consumer and profitably manage the future of this iconic brand."

Myron E. (Mike) Ullman, III, chairman and chief executive officer of JCPenney said: "Liz Claiborne is one of the most recognized brands in the history of American apparel retailing with a deeply loyal following, and our research shows that it is among the most desired by the JCPenney customer. In capitalizing on each of our strengths, this agreement brings huge benefits to both companies by giving our customers a substantially expanded Liz Claiborne offering at a more accessible price point than ever before."

Liz Claiborne New York, Designed by Isaac Mizrahi, Moves to QVC

Liz Claiborne Inc., in collaboration with Isaac Mizrahi, announced that it has entered into an agreement to offer the prestigious Liz Claiborne New York line on QVC, one of the world's leading multimedia retailers, beginning with Fall 2010 merchandise. Under the agreement, Isaac Mizrahi will design the line of premium apparel, accessories and home products; QVC will merchandise and source the product, with Liz Claiborne Inc. providing brand management oversight.