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Liz Claiborne posts Q2 losses and announces radical cost cuts

Fashion group Liz Claiborne has reported a wider-than-expected second-quarter loss.

Liz Claiborne, which owns the Juicy Couture, Mexx, Kate Spade and Lucky Brand jeans chains, revealed that second-quarter net losses in the 13 weeks to July 4 widened in 2009 to $82.1m (£49.5m), versus a $23.2m (£14m) loss in the same quarter in 2008. Net sales were down 29% year-on-year to $684m (£412m).

The company said it intends to cut an additional $100m (£60.3m) in costs, with $25m (£15.1m) of this achieved by closing stores and cutting operating costs in the Mexx business, which mainly operates in Europe.

Additional cuts will be made from further consolidation of distribution centres and redundancies among corporate and production staff.

Chief executive officer William McComb said: “Our financial results in the second quarter reflect the continuing challenges of turning around underperforming businesses in the current recessionary environment….Consistent with the outlook we provided on our May call, we posted comparable store sales decreases of 17% at Juicy Couture, 23% at Lucky Brand, 15% at Kate Spade and 12% at Mexx.

“Although overall adjusted gross margin was down compared to last year, we are encouraged by the improvement in this metric in all three segments compared to first quarter levels.”

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