Liz Bids Ellen Good-Bye

Liz Claiborne Inc (New York) has agreed to sell its Ellen Tracy brand to a group of investors for up to $42 million in cash. The investors include Radius Partners LLC (Chicago); Windsong Brands LLC (Westport, Conn.); Barry Sternlicht, chairman and ceo of Starwood Capital Group LLC (Greenwich, Conn.); and former retail executive Marvin Traub, now president of Marvin Traub Associates Inc. (New York).

The transaction is expected to close in the second quarter of 2008. To ensure a smooth and orderly transition for retail partners, vendors and employees, Liz Claiborne has agreed to provide certain transition services to the new company.

Of the 16 brands that Liz Claiborne announced it was putting under review as part of an organizational refocus, only two now remain, Mac & Jac and Kensie, and the company has set a deadline of the end of the first quarter to decide their fates. Eight of the 16 brands have been sold, one is being kept, one is being licensed, two were folded into other brands and two (First Issue and Sigrid Olsen) were closed.

Women’s Wear Daily reports that the new Ellen Tracy owners plan to maintain the label as a bridge brand and license it out. First, they have to find a designer. George Sharp resigned as vp of design last month to join St. John Knits Intl. Inc. (Irvine, Calif.) as executive vp of design. Finally, they have to pump up the business. When Liz Claiborne acquired Ellen Tracy in 2002, it did $171 million in volume; WWD says sources now estimate it does less than $75 million.

“Ellen Tracy remains a very powerful brand,” said Traub, “with enormous support from consumers and retailers alike, and we look forward to building on its great foundation.”