Liz Claiborne

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Transcript of Liz Claiborne

  • 1. Jeff Gaetani Sheri Vella Mandi Marcino Eric Defazio Dan Reid

2. 3. Liz Claibornes Company Profile 4. Profile

  • Liz Claiborne is a designer and #1 marketer of women's apparel in the US
  • They also sell mens apparel, jewelry, cosmetics, shoes, sunglasses, home furnishings, watches, and fragrances
  • They have a multibrand portfolio strategy - it sells clothing in all price ranges
  • Brands: Liz Claiborne, Liz & Co., LizSport, LizWear, Elisabeth, Claiborne, Dana Buchman, and Emma James

5. Profile Continued

  • Liz Claiborne sells most goods in department stores
  • Operate in 195 specialty and outlet stores
  • The company sells its products in the U.S. and in more than 60 other countries
  • Liz Claiborne does not make any of its products, contracts work out
  • Main manufacturers are in Asia and Central America

6. MainStrategic Issue 7. Strategic Issue(s)

  • How should Liz Claiborne refocus their product line and marketing strategy to obtain the industry position they once held?
  • Other issues:
    • Should Liz Claiborne incorporate a downscoping strategy because over diversified?
    • How will Liz Claiborne Inc. fill the void left in strategic leadership from the absence of Liz Claiborne, her husband, and Jay Margolis?

8. SWOTAnalysis 9. Strengths

  • Marketing
  • Technology
    • SURF
  • Distribution
  • Social Responsibility
    • Womens Work & Liz Claiborne Foundation

10. Weaknesses

  • Economic conditions
    • profitability of retailers
  • Managements focus

11. Opportunities

  • Global expansion
  • Product development

12. Threats

  • Shoppers shift
    • shopping malls to specialty stores/boutiques
  • Department stores bankruptcies

13. External Environment Analysis 14. Demographic

  • Working women at all price points
    • Elisabeth line for forgotten women
    • Petite women
  • Conservative men and young men
  • Childrens line (1984-1987)

The General Environment: 15. Economic

  • Customers more demanding and adamant about paying less
  • Sales affected because consumers sensitive to inflation rates
  • Manufacturing done overseas, economic instability an issue

The General Environment: 16. Political/Legal

  • Government control of competition
  • Political risk and instability a factor of Third World countries
  • Provides labeling with content and care instructions
    • high cost

The General Environment: 17. Sociocultural

  • Committed to the welfare of women
  • Women Work
    • develops and funds programs designed to heighten awareness of women and their families about domestic violence and work/family conflicts
  • Liz Claiborne Foundation
    • assists social welfare programs

The General Environment: 18. Technological

  • SURF (Systems Updated Retail Feedback)
    • Allows quick response
  • Constantly changing/upgrading
    • high cost associated

The General Environment: 19. Global

  • International product
    • affected by recessions
    • subject to cultural trends
  • Already popular in Canada and England
    • dress like us

The General Environment: 20. The Industry Environment

  • The fashion industry is highly competitive and is located in the maturing stage of the industry life cycle
  • Hardly any threat of new entrants
  • Large economies of scale:
    • Do to decrease in retailers, decrease in access to distribution channels, and an increase in need for financial resources

21. Industry Environment Analysis Continued

  • Intense rivalry between Liz Claiborne and its major competitors
  • All firms competing to be first company to release what would be the future trends in fashion
  • Competition also intense because firms are competing in same retailers stores

22. Industry Environment Analysis Continued

  • Trying to predict future trends make this industry very risky
  • Firms need to predict what consumer would like a year ahead of time
  • Buyers having all the power
    • The consumers dictate the sale of the goods and as long as style suits their tastes the consumer will pay a premium price for the designer clothing

23. The Competitor Environment

  • Highly competitive and constantly changing
  • Liz Claibornes competitive advantage of versatility and diverse markets
  • Competitors:
    • Jones of New York
    • Evan Piccone
    • Chaus
    • JH Collectibles

24. InternalEnvironment Analysis 25. Resources 26. Reputation

  • Described by Working Woman Magazine as the wizard of the working womans wardrobe.
  • Proven by increased sales
  • Providesquality products at affordable prices

27. Human Resources

  • Liz Claiborne(1976 - 1989)
    • superior design knowledge, innovative thinker
  • Arthur Ortenberg(1976 - 1989)
    • expert in business administration
  • Jay Margolis(1989 - 1993)
    • Vice Chair & VP of Womens Sportswear, core division and most profitable

28. Capabilities Capabilities CapabilitiesCapabilities 29. Distribution

  • Liz Claiborne distributes mostly through Department Stores
  • Liz Claiborne opened First Issue, retail, and outlet stores
    • eliminate threat of competition

30. Marketing

  • Liz Claiborne markets its merchandise as outfits instead of separates
  • Have six seasonal lines
  • To market product outside U.S. - tailor strategies specifically for each country

31. Innovation

  • Design Skill - design mix-and-match coordinates that can be variously combined
  • Modern classic rather than trendy
  • Designed with practicality, style, and longevity in mind
  • Goal is customer confidence

32. Core Competencies 33. Brand Name

  • Liz Claiborne symbolizes quality
  • Outfits more women than any other designer
  • Diversity of logo

34. Marketing

  • Leader in outfit marketing
  • Market cultural tailored clothing in boutique style shops
  • Strategic action of ignoring standard for option of six seasonal lines

35. Technology

  • SURF (System Updated Retail Feedback)- provides weekly reports on sales trends nationwide
  • Enables management to make long-term and short-term fashion plans

36. Distribution

  • Distributes through high quality, reputable department stores (Filenes, Bloomingdales, Lord & Taylor, and Macys)
  • Operation of Company-owned stores act as laboratories
  • Outlet stores located a distance away from department and retail stores to preserve brand name

37. Financial Analysis 38. Ratio Analysis

  • The following is a financial analysis of profitability, liquidity, debt management, activity and shareholders return ratios
  • Data is from 1993, 1997, the industry, and the market
  • * Textile - Apparel Clothing
  • ** 8,000 Publicly Traded Companies

39.

  • Profitability ratios show the combined effects of liquidity, asset management, and debt management on operating results.
    • Return on assets measures the amount earned on each dollar invested in assets
    • The net profit margin represents the amount of each dollar of revenue that results in net income Liz ClaiborneIndustry*Market** 1993 1997 1997 1997
    • Return on Assets 10.3%13.3%7.8%2.5%
    • Net Profit Margin5.8%7.7%5.3%5.7%

Profitability 40.

  • Liquidity ratios measure the risk level and ability of a firm to meet its current obligations.
    • The quick ratio measures the companys ability to pay its short-term obligations
    • LizClaiborneIndustry*Market**
  • 1993 1997