Liz Claiborne Snaps Up Another California Company
Turning to the West Coast again to tap into the thriving global contemporary market, New York apparel giant Liz Claiborne Inc. acquired C&C California Inc. for more than $28 million.
The purchase of Los Angeles–based C&C represents the fourth time Liz Claiborne has acquired a California apparel company in the last six years. C&C joins Lucky Brand Jeans, Laundry by Shelli Segal and Juicy Couture in Claiborne’s growing stable of successful California firms started by independent businesspeople.
Under terms of the deal, Claiborne paid about $28 million in cash and agreed to make three additional annual payments based on C&C’s performance starting in 2007. In 2004, C&C had about $21 million in sales. Of that, approximately 96 percent came from its women’s business, whose high-end T-shirts have attracted a big following. Men’s and children’s clothing make up the remaining 4 percent of C&C’s revenues.
Claiborne said it expects the transaction to add to 2005 earnings by about 3 cents a share.
Angela Ahrendts, executive vice president at Claiborne, said the company was attracted to the opportunity to diversify its distribution channels and expand C&C’s offerings. She said C&C is sold in 1,300 specialty stores. She predicted that in five years C&C could diversify its products to the point that women’s apparel would contribute 65 percent to 75 percent of the business and other categories would be developed.
What’s more, Ahrendts said C&C would help fill out Claiborne’s roster of contemporary labels. Whereas Laundry specializes in dresses and Juicy owns the “L.A. Hollywood glam” look with its novelty clothes, C&C has a more classic appeal. “You need more contemporary classics,” she said.
Claire Stansfield and Cheyann Benedict, who started C&C together in 2002, will stay on as co-presidents. Stansfield said the duo always knew that if they wanted to build a global brand, they would need to partner with another company.
With Claiborne’s backing, C&C will be able to introduce swimwear as early as Summer 2006, Stansfield said. She added she is not worried that C&C might dilute its brand because it will stick to the basics of T-shirts and jeans.
—Khanh T.L. Tran
