Liz Claiborne CEO Bill McComb on Kate Spade Success & Juicing Up Juicy


Kate Spade Store Redesign

When Bill McComb took the helm of Liz Claiborne Inc. in 2007, he laid out an ambitious plan for kate spade new york, Lucky Brand and Juicy Couture: Build each of these marquee labels into a global lifestyle brand.

Four years later, while Liz Claiborne Inc. reported another quarter of losses in July, we see signs that McComb’s vision is paying off—kate spade’s sales are up 64% compared to 2010, and Lucky posted a 13% increase. And McComb says it’s only a matter of months before Juicy starts jumping too. Liz Claiborne Inc.’s CEO talked to The High Low about these diverse brands—and the shared strategy that has put all three on the path to double-digit growth.

The High Low: So kate spade new york direct to consumer sales grew by 77% this quarter. How did you unlock the potential of this 18-year-old brand?

Bill McComb: The first step was to bring in our brilliant creative director, Deborah Lloyd—who’d had hugely successful runs at Burberry and Banana Republic—and pair her with Craig Leavitt as CEO. Because kate spade was the last brand acquired under my predecessor, the business wasn’t yet caught up in the corporate structure of the parent company — which was built around sales channels, not brands and, frankly, was beginning to unravel. So I allowed kate spade to remain an independent, yet fully integrated operating company; we kept it highly entrepreneurial, and we kept it small.

THL: How did this new team rethink the brand?

WLM: Deborah had a clear road map for kate spade new york in terms of its “handwriting”—its visual and product expression—and a big part of the plan was to introduce apparel, which was a risky venture and not one that many handbag companies had done successfully. In April of 2009 we were looking forward to an exciting apparel launch in the fall, but our stores were still little white handbag museums—very plain and simple—and our traffic was plummeting. So I gave Craig, Deborah and their head of marketing, Kyle Andrew, a challenge to remake the small 5th Avenue store [in New York City] with a minimal capital expenditure—and by minimal I mean $25,000 to $30,000. We would use that store as a lab, and if the concept was successful we would scale it.

THL: What was riding on this experiment?

WLM: It’s always darkest before the dawn, and April 2009 was 3 a.m. for kate spade. Within six weeks, the team executed a colorful, energetic store format, which immediately drove major increases in traffic. Each store now is designed to look like the kate spade customer’s idealized apartment, which meant we defied some laws of modern retail. We actually put walls up and chopped the store up to make it feel like rooms in a home. The fall came, the new product launched, and it all worked together—centered on a crystal clear target audience definition, a statement about the consumer that’s written up on a big wall behind the cash registers in every store.

THL: You refreshed Lucky Brand too, but in a different way—which strategies carried through and which ones did you have to tweak?

WLM: The recipe is the same: the right leadership, great product, and—without major capitalization—new visual merchandising to bring the stores to life. Lucky has always had a clear look and feel, but the stores were poorly edited, which left the brand too wide and uncommitted. Creative director Patrick Wade and CEO Dave DeMattei, who took over in 2009, put a laser focus on denim and the denim lifestyle, but with modern handwriting, not just the ’70s peace vibe or ’80s rock-and-roll. The stores now are much more consumer-friendly: it’s easier to find and navigate sizes and styles; it’s easier to see the array of washes relative to sizes and styles. Second-quarter sales were up 22% compared to 2010.

THL: Juicy Couture is the trendiest of these three brands—why was it third in line for renovation?

WLM: The founders left the business only at the end of 2009, and there was a state of suspension, creatively, before I was able to bring in LeAnn Nealz as President and Chief Creative Officer. She’s been at Gap, Calvin Klein, Theory, and she came to us from American Eagle—she really understands the women’s contemporary space, she understands the LA girl, and she has an amazing vision of where Juicy needs to go. What Juicy is really about is Southern California casual luxury—a certain Laurel Canyon, Beverly Hills, Los Angeles look and feel—that is timeless. And it’s a look that transcends global tastes even better than traditional American preppy.

THL: So what’s the new Juicy going to look like?

WLM: You’ll see a “re-couturing” of the stores this fall—different properties and elements than what we brought to kate spade, but the same lift and renewal: new art packages, new merchandising systems and, starting with spring 2012, fantastic new product. LeAnn has said that she’s going to be celebrating the “couture” more in Juicy Couture. It’s still a casual California lifestyle brand, but the quality is up, and the attention to detail on fit is tremendous. The aesthetic has a whole new beat of relevance—and the ad campaign you’ll see in September magazines reflects that.

THL: How big can these brands be?

WLM: Any of them could join the ranks of Coach, Guess and Ralph Lauren, the very enviable monobrand companies, because I’m recruiting people that are uniquely passionate about the brand they are building—tenured apparel-retail veterans who run their business with a high degree of entrepreneurship and flair. There’s an affinity between each team and the product, the lifestyle, the positioning. And what that unlocks is the high double-digit growth we’re already seeing in some of these brands—I believe that globally, each of these brands has the potential to do $1 billion and more in sales.