My view on this name has been, and continues to be, that it is not going bankrupt – which a $2 stock suggests is quite possible. The company has secured new lines of financing to mitigate default risk, is cutting capex net year in half, and is now FINALLY cutting into what has consistently been one of the fattest SG&A structures in apparel (43% SG&A ratio???).
We’ve seen the near-term bottom of estimate revisions for LIZ, and with what I believe is minimal balance sheet risk, and a call option on monetizing Juicy, Lucky, and Kate Spade while selling the legacy Liz Claiborne brand to a major retailer (like Wal*Mart?), it is not tough for me to build to a net value 2-3x where the stock is trading today.