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Liz Claiborne Said to Talk With Buyout Firms About Sale of Its Mexx Brand

Liz Claiborne Inc. (LIZ), the owner of Juicy Couture and Kate Spade, is making presentations to private-equity firms to sell its money-losing Mexx brand, said two people with knowledge of the matter.

Leonard Green & Partners, Sun Capital and Golden Gate Capital are among the firms that have explored a possible acquisition of the Mexx business, said the people, who asked not to be identified because the talks are private. Mexx is Liz Claiborne’s largest division and accounts for about a third of its revenue.

Final bids will be due in a few weeks with a sale probably completed around early September, said one of the people. Liz Claiborne is seeking to maintain a small stake in Mexx, which has stores in Europe, Russia and Canada, the person said.

The Mexx business may fetch about $100 million, said the person. Liz Claiborne will also try to require any buyer to put in as much as another $100 million to cover debt and capital requirements, said the person.

Jane Randel, a Liz Claiborne spokeswoman, declined to comment on the company’s progress in studying alternatives for Mexx. Liz Claiborne is pursuing its goal, stated April 28, to reduce its exposure to Mexx by various means, she said.

“There are no timelines at this point, but we continue to pursue our previously stated goal of break-even operating profit for the global brand by the end of 2012,” Randel said.

A spokesman for Sun Capital declined to comment. A representative for Golden Gate couldn’t be reached for comment and a spokesperson for Leonard Green didn’t immediately return calls.

Since 2007, Chief Executive Officer Bill McComb has sought to create freestanding, profitable operations for Mexx, Juicy Couture, Lucky Brand and Kate Spade. In 2009, he brought in Thomas Grote, former president of Esprit, to run the Mexx division and revive its sagging sales in Europe.

Liz Claiborne said first-quarter international sales fell 9 percent due to declining retail and wholesale revenue in Mexx Europe. The company has posted losses in each of the past 14 quarters and the share price has sunk more than 80 percent in the past four years.

To contact the reporters on this story: Jeffrey McCracken in New York at jmccracken3@bloomberg.net; Jonathan Keehner in New York at jkeehner@bloomberg.net

To contact the editor responsible for this story: Jennifer Sondag at jsondag@bloomberg.net

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