Still, the road ahead is not pretty. McComb has been executing a massive company reconstruction. He has disbanded an entire level of presidents; licensed, sold, or shut down 14 of the company's 46 brands; and reorganized the remaining businesses into distinct retail and wholesale categories. So far, the financial results have been dismal. He intends to flog the retail brands with the most potential -- Kate Spade, Lucky Jeans, and Juicy Couture, in his view -- by opening 300 new stores for the three labels in the next two years, hoping they'll help drive $3 billion of the overall business. And to his credit, sales at Juicy stores opened more than a year are up 25%. Both the internal and external models McComb is pursuing -- a flatter organizational structure and a "Coach model" of retail pitching "affordable luxury" to the trading-up crowd -- are gauged to make the company leaner and give it a tighter focus.
His biggest challenge may be the Liz Claiborne brand, which represents 20% of overall revenues. To win over new retail customers, he first has the daunting task of regaining the loyalty of the department stores, the brand's principal distributors, which have come to regard it as a fusty, soulless collection of basics. What's more, morale under McComb is hardly soaring: He has cut 800 jobs, and it's uncertain how patient his board will be with a plan that has yet to deliver results. The stock is down more than 50% on his watch.
Mizrahi brings legitimate wattage to Liz Claiborne. He earned Target more than $300 million at retail annually and still has his own Bergdorf Goodman couture line, making him perhaps McComb's best draw for the boomer woman who refuses to pull on the mom jeans. In other ways, though, Mizrahi is a wild card. Back in 1998, the outspoken designer couldn't keep his own label afloat, and his backer, Chanel, killed it. Duplicating his Target success at Macy's will be considerably harder. "Now he's trying to bring [his line] into a museum that has a lot of other artwork," says Marshal Cohen, a retail analyst at NPD Group. "Will he be able to stand out? And will Liz be willing to go that extreme?"
Gunn, sounding less like his Runway persona and ever more the entrepreneur, is optimistic. "I honestly think that in the not-too-distant future, this company will establish new paradigms of operations, the likes of which I don't think this industry has ever seen." Then he adds, "I think we're going to be a Harvard Business School case study." Here's hoping it's not a postmortem.
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Recent Comments | 9 Total
May 5, 2008 at 4:11am by Jay Tatum
I think this article is a perfect example of how catalytic leadership can change and transform an institution or industry without changing the catalyst. McComb's decision to pursue Gunn to serve in the position of chief creative officer of a descending business provides a catalyst for change in an industry constantly in a state of creative flux. While change may be a constant, the kind of change needed by McComb was the kind that works! Tim Gunn's new found fame as a television personality is but a small part of the kind of change and leadership he brings to any endeavor. It's about creating and recreating vision and value that seem to elude every organization and industry that aspire to be on top only to be replaced by the next big thing. Tim Gunn's reign as chief creative officer may bring the kind of change that Liz Claiborne needs to stay on top in the industry but the real genius of his tenure will be the kind of leadership he embodies with his boss, McComb. Simply restoring or resurrecting Liz Claiborne may not be enough, it may just need to be recreated in a new image that exceeds the old. Will McComb and Gunn be able to provide that kind of change and leadership? Maybe, but serving as the catalysts for change is a good place to start. Long Live Good Leadership!