Reporting from Dallas — J.C. Penney Co. said Wednesday that it had reached an agreement with Liz Claiborne Inc. to pay $267.5 million for the Liz Claiborne brands and fashion-jewelry brand Monet.
Penney has been the exclusive licensee for all Liz Claiborne and Claiborne-branded merchandise in the U.S. and Puerto Rico since August 2010. The original 10-year agreement allowed Penney to exercise its rights to purchase the brands after the fifth year of the agreement, but the terms were accelerated.
The Plano, Texas-based department store chain expects that by August 2012 its stores will begin selling Monet, a staple fashion-jewelry brand at higher-end department stores for decades.
Incoming Chief Executive Ron Johnson said Liz Claiborne and Monet are "classic brands that resonate deeply with consumers." He said the brands give Penney "a strong foundation for continued innovation and growth."
Johnson, who comes to Penney from Apple Inc., where he led that company's store expansion in the last decade, officially takes over as CEO on Nov. 1.
The transaction is expected to close in 30 days, and Penney said it planned to retain the Liz Claiborne design team. The brands included are Liz Claiborne, Claiborne, Liz, Liz & Co., Concepts by Claiborne, LC, Elizabeth, LizGolf, LizSport, Liz Claiborne New York and Lizwear brands.
Penney is also paying Liz Claiborne Inc. $20 million to develop exclusive brands for the chain of 1,100 department stores.
On Wednesday, Liz Claiborne Inc. also completed the sale of its Dana Buchman brand to Kohl's Corp. and sold its Kensie brands to Bluestar Alliance for $40 million.
The struggling company plans to use some of its new cash to pay down debt and said it would focus its business around luxury brands Lucky Brands Jeans, Kate Spade and Juicy Couture. Lucky Brands and Kate Spade have had strong sales in recent months, but Juicy Couture has posted sales declines.
Liz Claiborne is also planning a name change soon.
Halkias writes for the Dallas Morning News/McClatchy.
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