Liz Claiborne, meet JCPenney

Retail Wire panelists had a chance to weigh on on the move by Liz Claiborne to take its signature brand “exclusive” to JCPenney for the next ten years. My take:

This news story is fascinating on several levels. First, it is probably the biggest development yet in the shift from national brands to exclusive brands over the past five years. Liz Claiborne simply couldn’t afford to let its signature brand languish in several struggling regional department stores and fail in its only national outlet. JCPenney provides the sort of national scale and moderate positioning appropriate for the Liz Claiborne brand.

Second, this represents a major shift in the Liz Claiborne business model. JCPenney will be developing and sourcing goods through its own product development arm, rather than through the Liz Claiborne Company itself. Claiborne is pursuing what you might call the “Iconix model”, a much richer financial model tied to brand management rather than sourcing and manufacturing.

Finally, the Liz Claiborne deal looks like a coup for JCPenney but also represents a big challenge. JCPenney has been guilty for the last several years of brand proliferation and duplication of assortment, especially coming out of its product development team. If Liz Claiborne is going to work at JCP, it needs to be treated as the most important brand in the store…and several other labels need to go away.

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