LIZ: Bill… C’mon Man!

When your stock goes from $40 to $2, you just miffed the Q, and you secured credit lines by the skin of your teeth – DO NOT go public with a strategy to add high priced retail stores in a recession.
Don’t know if anyone caught this, but Reuters on Friday picked up on an interview with LIZ CEO Bill McComb. The punchline is that Mr. McComb discussed the revamped (Mizrahi) Liz Claiborne line, which will initially come out at price points about in line with current offerings. He then notes growth opportunity in Europe and Asia. I’m ok with that.

But then he went on to talk about going into higher price point products, and expanding this into more company-owned full price retail stores.

C’mon man! Why’d you have to say that? Regardless of your plans, you have not exactly earned the right to grow. You just tanked the quarter – again – and finally secured required credit lines to maintain the status quo. I’m not against thinking about growth in the long-term strat plan – just don’t articulate this to the Street!

My vote? Sell the Liz Claiborne brand to Wal*Mart/Li&Fung for 0.3-0.4x revs, and monetize Juicy/Lucky and Kate Spade. Net out the debt, blow out corporate, buy out long-term liabilities, and view monetization of any other brands as a call option. All that still gets me to a value in the high single digits.

The simple fact that the Board has not yet acted with the stock price going from $40 to $2 shows either 1) incredible vision, 2) incredible stupidity and/or 3) severe lack of acknowledging any fiduciary responsibility to shareholders.

This thing gets one more quarter of my patience.

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