Liz Claiborne Inc (NYSE:LIZ) has agreed to sell four of its brands for $328 million in cash.
In an attempt to strike a trade-off between lower earnings and reduced debt, the company has sold its Liz Claiborne and Monet brands to J.C. Penney (NYSE:JCP) and its Kensie brand to Bluestar alliance. The fourth brand, Dana Buchman, goes to Kohl’s (NYSE:KSS). The company also reached agreement with Donna Karan International to terminate its license for DKNY Jeans and DKNY Active brands.
William L. McComb, Chief Executive Officer of Liz Claiborne (NYSE:LIZ) said: “Today’s announcement brings … value creation opportunities to reality, resulting in $328 million in total cash proceeds, inclusive of sale proceeds of $308 million.” He also said that “consistent with our stated goal to de-lever the Company, these proceeds will be used to further reduce debt. These transactions, coupled with the previously announced Elizabeth Arden transaction and Mexx joint venture agreement with The Gores Group, underscore our focus on unlocking value for our stakeholders. After the closing of these transactions, we expect year end 2011 net debt to be in the range of $270 to $290 million.”
LIZ (NYSE:LIZ) is trading at $6.69 today, up 31.08%. Shares are down 25.00% in one year. The stock’s trading range for the year is between $4.02 and $7.90.