Filed under: Deals, Liz Claiborne (LIZ)
Liz Claiborne (NYSE: LIZ) has concurred to sell its Ellen Tracy brand to a group of investors including Radius Partners LLC, William Sweedler of Windsong Brands LLC, Barry Sternlicht and Marvin Traub in cash deal that could reach $42 million — $27.3 million in cash and an earn-out of up to $15.
Liz Claiborne CEO William McComb said that “Ellen Tracy is an iconic brand, and we are confident that the new owners will invest in this business and give it the care and attention it deserves. We’re also thrilled that the substantial majority of Ellen Tracy employees will be retained as part of the deal.”
Perhaps Liz’s management should have given the decision to acquire the company in the first place more attention. In 2002, the company paid $180 million for Ellen Tracy.
The company’s failed effort to diversify its brands aside, there may be reason for optimism now that Liz Claiborne has made the decision to sell non-core brands and focus on the flagship. The signing of design legend Isaac Mizrahi could lead to a major turnaround of the company over the next few years, and investors willing to go against the grain may want to take a look in light of today’s pullback.
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