NEW YORK — Liz Claiborne Inc. is splitting.
Seven months after becoming chief executive officer, William L. McComb has made his biggest round yet of executive layoffs and reorganization. McComb is scrapping the group president role and literally dividing Claiborne’s portfolio between “power brands” and the rest — a hint of more changes to come at the company’s July 11 Investors Day meeting. In addition, it indicates some of the brands McComb could sell, spin off or close — a strategy he has openly discussed as a way to get the $4.99 billion Claiborne back on the growth path.
Following the language he has been using to describe Claiborne’s “power brands,” McComb is “delayering” the company and dividing it into “a brand-centric, vertically organized direct brands division and a customer-focused, cost-efficient partnered brands division.”
Claiborne president Trudy Sullivan will run the less sexy of the two new divisions, which includes Liz Claiborne/Claiborne, Monet and the Moderate Department Store Brands; C&C California, Dana Buchman, Ellen Tracy, Enyce, Laundry by Design, Mac & Jac/Kensie and Prana; exclusive brands for J.C. Penney, Kohl’s and Sears; DKNY Jeans and DKNY Active, and cosmetics and fragrances. Sullivan will continue to report to McComb.
Jill Granoff, formerly group president of direct-to-consumer, is being promoted to executive vice president of direct brands. Granoff will be responsible for Juicy Couture, Lucky Brand and Sigrid Olsen, as well as the company’s outlet and e-commerce business. In a further shake-up of the executive suite, Granoff will report to McComb — effectively placing her on the same level as Sullivan.
The direct brands will receive more time and talent investment going forward, and all of their parts — from accessories to international — will be run under their own direct management. “We want to give them the full organizational structure that Coach had when it was sprung out of Sara Lee,” McComb said.
Granoff fared well in the elimination of Claiborne’s group presidents. After shaking up the group president structure in February, McComb let go two — possibly three — of the senior executives that held that role.
“Jill brings a tremendously broad range of experience from Victoria’s Secret, Estée Lauder and as a consultant,” McComb said. “In the last year, she proved her mettle as group president in charge of direct-to-consumer, consistently exceeding expectations.”
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The company also appointed a new chief financial officer, Andrew C. Warren, an 18-year General Electric veteran who most recently served as senior operations leader of GE Audit Staff. He replaces Mike Scarpa, who was promoted to chief operating officer at the end of January.
McComb sees a bit of himself in Warren, a 40-year-old industry outsider who rose in the executive ranks of a blue chip company. McComb, 44, joined Claiborne in November from Johnson & Johnson, where he spent most of his career and rose to group president.
“He’s spent all of his career at GE and is a highly regarded and very high-potential executive there,” McComb said. “One of the things that attracted him to this job was the creative part of the business.”
Group president and Claiborne veteran Karen Murray, who lost responsibility over men’s wear and midtier brands in February, will be leaving the company. Susan Davidson, group president of nonapparel categories who gained oversight of Kate Spade in February, also will be exiting.
According to a statement, “The company is discussing the possibility of other opportunities within the organization for Pamela Thomas-Graham, previously group president, better and moderate apparel.”
Mark Walsh, who was promoted in February to group president from senior vice president of Mexx Europe Holdings, will stay on as the president of “portfolio brands,” i.e., C&C California, Dana Buchman, Ellen Tracy, Enyce, Laundry by Design, Mac & Jac/Kensie and Prana.
Susan Kellogg, formerly group president of bridge and contemporary lines, left in the February shake-up.
Claiborne said it plans to name a new head for the Kate Spade business soon. That person will report to McComb.
“There are some holes in here and some positions open,” McComb said. “By July 11, some of those names will be announced. Today’s announcement is the first step in moving toward our framework.”
The July 11 half-day meeting also should reveal more details of the company’s future structure and the roles of the 40-plus brands in the portfolio — all of which, besides the “power brands,” are susceptible to divestiture, including selling, closing or being turned into an exclusive for a retailer.
The division Wednesday reflects the “different cultural profiles” of the two segments. It is not about wholesale versus retail channels, but rather about the brand potential, McComb said. He noted that the different divisions in the company increasingly have been working off separate models, and that the move creates visibility in how these different businesses operate.
McComb promised that in three weeks’ time he “will continue to talk about our evolved partnering model.”
Wednesday’s announcement “goes right to the heart of the strategy we are setting up: A brand-centered organization structure,” he said.