Liz Claiborne to cut work force

NEW YORK Liz Claiborne Inc. announced today that as part of its realignment plan, the company expects to cut 600 to 800 positions, or 7% to 9% of its non-retail based global work force. The company reported that it anticipates this reduction in the work force, as well as other initiatives, will yield annual cost savings of $100 million in 2008, and an additional $45 million in each of 2009 and 2010, totaling annual cost savings of $190 million by 2010.

William McComb, ceo of Liz Claiborne, added, "Reducing the number of positions at the company is an extremely difficult but necessary decision for Liz Claiborne Inc. at this time. As a leaner, more streamlined operation, we will be better positioned to deliver growth and build shareholder value."

Part of the company's streamlining plan is the possible sale, discontinuation or licensing of the following brands: C&C California, Dana Buchman, Ellen Tracy, Emma James, Enyce, First Issue, Intuitions, J.H. Collectibles, Kensie, Laundry by Design, Mac & Jac, prAna, Sigrid Olsen, Stamp 10, Tapemeasure and Tint. These brands are expected to generate 2007 sales of approximately $800 million.

Liz Claiborne also reported that it plans to aggressively expand the specialty retail store base of the Juicy Couture, Kate Spade, Lucky Brand Jeans and Mexx brands, with a goal of opening over 300 stores, leading to a total door count of more than 800 by year-end 2010. The company also intends to drive growth for its direct brands segment through category expansion, highly visible marketing campaigns brand-centric outlet and e-commerce strategies, and international growth via select wholly-owned stores and third party relationships.

For 2007, Liz Claiborne now expects earnings per share of $1.90 to $2.00, with adjusted net sales expected to be flat to down low-single digits compared to last year. For the second quarter of 2007, the company expects adjusted net sales to be flat as compared to last year, and adjusted earnings pers share to be in the range of 22 cents to 24 cents.

In 2008, the company expects to achieve full year sales of $4.2 billion to $4.3 billion and adjusted earnings per share of $2.35 to $2.50.