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Liz Claiborne Inc. and Li & Fung Complete Long-Term Buying Agency Agreement

Posted on: Tuesday, 31 March 2009, 08:59 CDT

NEW YORK, March 31 /PRNewswire-FirstCall/ -- Liz Claiborne Inc. (NYSE: LIZ), today announced the completion of its long-term, exclusive Buying Agency Agreement with Hong Kong-based global consumer goods exporter Li & Fung Limited ("Li & Fung" or "the Group", SEHK: 494). Li & Fung now acts as the primary global apparel and accessories sourcing agent for all brands in the Liz Claiborne Inc. portfolio, including Lucky Brand, Juicy Couture, Kate Spade, and Isaac Mizrahi-designed Liz Claiborne New York with the exception of the jewelry product lines. Li & Fung will continue as the sourcing agent for Mexx as previously announced and will be Mexx's exclusive sourcing agent. Going forward, Liz Claiborne Inc. will pay an agency commission on its product purchases through Li & Fung.

Pursuant to the arrangement, Li & Fung has paid to Liz Claiborne Inc. an amount equal to US$75 million and will pay an additional amount not exceeding US$8 million by April 14. Consistent with its operational focus on managing cash flow and liquidity, the company will use the proceeds of this transaction to pay down bank debt.

About Liz Claiborne Inc.

Liz Claiborne Inc. designs and markets a global portfolio of retail-based premium brands including Kate Spade, Juicy Couture, Lucky Brand and Mexx. The Company also has a refined group of department store-based brands with strong consumer franchises including the Liz Claiborne and Monet families of brands, Kensie, Kensiegirl, Mac & Jac and the licensed DKNY(R) Jeans Group. For more information visit www.lizclaiborneinc.com.

About Li & Fung

Li & Fung is the world's leading consumer goods supply chain management company, managing the supply chain for retailers and brands worldwide. Headquartered in Hong Kong, the Group services its customers globally through a sourcing network of over 80 offices in more than 40 economies. Corporate website: www.lifung.com

Liz Claiborne Inc. Forward-Looking Statement

Statements contained herein that relate to the Company's future performance, financial condition, liquidity or business or any future event are forward-looking statements under the Private Securities Litigation Reform Act of 1995. Such statements are indicated by words or phrases such as "intend," "anticipate," "plan," "estimate," "project," "expect," "we believe," "we are optimistic that we can," "current visibility indicates that we forecast" or "currently envisions" and similar phrases. Such statements are based on current expectations only, are not guarantees of future performance, and are subject to certain risks, uncertainties and assumptions. The Company may change its intentions, belief or expectations at any time and without notice, based upon any change in the Company's assumptions or otherwise. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. In addition, some risks and uncertainties involve factors beyond the Company's control. Among the risks and uncertainties are the following: Our ability to continue to have the liquidity necessary, through cash flows from operations and availability under our amended and extended credit facility, which may be adversely impacted by a number of factors, including the level of our operating cash flows, our ability to comply with the financial and other covenants included in our amended and extended credit facility and the borrowing availability under our amended and extended credit facility which is determined primarily by the level of our eligible accounts receivable and inventory balances; general economic conditions in the United States and the rest of the world; lower levels of consumer confidence, consumer spending and purchases of discretionary items, including fashion apparel and related products, such as ours; continued restrictions in the credit and capital markets, which would impair our ability to access additional sources of liquidity, if needed; changes in the cost of raw materials, labor, advertising and transportation; our dependence on a limited number of large U.S. department store customers, and the risk of consolidations, restructurings, bankruptcies and other ownership changes in the retail industry and financial difficulties at our larger department store customers; our ability to successfully implement our long-term strategic plans; our ability to affect a turnaround of our Mexx Europe business; our ability to respond to constantly changing consumer demands and tastes and fashion trends, across multiple product lines, shopping channels and geographies; our ability to attract and retain talented, highly qualified executives, and maintain satisfactory relationships with our employees, both union and non-union; our ability to adequately establish, defend and protect our trademarks and other proprietary rights; our ability to successfully develop or acquire new product lines or enter new markets or product categories, and risks related to such new lines, markets or categories, including the risks associated with our sales of Liz & Co. and Concepts by Claiborne outside of better department stores and risks associated with our Liz Claiborne and Claiborne brands association with known designers and retailer and consumer acceptance of the resulting products; the impact of the highly competitive nature of the markets within which we operate, both within the United States and abroad; our reliance on independent foreign manufacturers, including the risk of their failure to comply with safety standards or our policies regarding labor practices; risks associated with the recently announced agreement with Li & Fung, which results in a single foreign buying agent for substantially all of our products; our international operations are subject to a variety of legal, regulatory, political and economic risks, including risks relating to the importation and exportation of product; our ability to adapt to and compete effectively in the current quota environment in which general quota has expired on apparel products but political activity seeking to re-impose quota has been initiated; our exposure to domestic and foreign currency fluctuations; and such other economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services and prices and such other factors as are set forth in the Company's in the Company's 2008 Annual Report on Form 10-K, including under the caption "Item 1A-Risk Factors". The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

SOURCE Liz Claiborne Inc.

Source: PR Newswire

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