JCPenney to Become Exclusive Department Store Destination for Liz Claiborne and Claiborne Brands

Liz Claiborne Inc. last month 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., 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 major component of this strategy involves 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.

The Liz&Co. and Concepts by Claiborne brands, launched at JCPenney in 2007, have consistently been among JCPenney's strongest exclusive brand performers. This new 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.

The Liz Claiborne Inc. line will launch on QVC 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. Liz Claiborne New York will exit the department store channel completely after Holiday 2009.