JCPenney (Plano, Texas) has entered into a long-term licensing agreement with women's apparel company Liz Claiborne to be the exclusive retailer of the brands’ line in the U.S. and Puerto Rico. The company’s more upscale Liz Claiborne New York brand, designed by Isaac Mizrahi and available at Macy's Inc. and Dillard's Inc department stores, will be sold only on the television shopping network QVC.
Liz Claiborne says it apparel brands, which launched at Penney’s in 2007, are among the department store’s top performers. The new agreement begins in August 2010 and will run for 10 years. After five years, the department store retailer has the option to acquire the company’s licensed trademarks.
The agreements for Liz Claiborne free the struggling apparel company from significant inventory risk, overhead, working capital and support-staff commitments. "We will no longer be subjected to the financial volatility of up-front discounts, end-of-season markdowns and returns, all with no downside protection," says chief financial officer Andy Warren.
The announcement sent Liz Claiborne shares up 31 percent last week.