Brands: Liz Claiborne Stumbles for Lack of a Brand Portfolio Strategy

Tue, 05/06/2008 - 04:00 — admin

During the 1980’s the Liz Claiborne brand rode to success on the backs of working women who appreciated the versatility and affordability of the fashionable label.

Fueled by their success, and looking for opportunities to expand, the Liz Claiborne Company (NYSE:LIZ) began purchasing up and coming brands, eventually acquiring a portfolio of some 3 dozen.

But without a clear strategy to position and manage them, the brands faltered and the flagship Liz Claiborne brand began to lose its cachet---one writer recently even characterized the label as “stodgy.” Ouch.

Profitability suffered and eventually the company was forced to divest itself of eight labels, closing down two, licensing one and folding two others into existing company names. (Brandweek)

So, what happened?

According to CEO William McComb, who was brought in to oversee a turnaround of the company, “While Claiborne really pioneered the multibrand portfolio model, it never got the idea that it was OK to sell, exit or divest a business…Good portfolio management, to me, is looking at what you're incubating, what you're buying, what you are milking and what you're getting rid of. [The company] didn't have a portfolio management strategy." He's right.

Every brand needs to have a positioning strategy to be successful. But when a company owns brands within the same vertical they must develop an effective brand portfolio strategy as well that not only specifies individual brand positioning, but defines the brand ‘job descriptions’---the roles and relationships of a company’s brands to one another that are critical to the success of company brands inhabiting the same vertical.

Lack of an effective brand portfolio strategy causes customer confusion and a creeping ‘sameness’ and commoditization across the portfolio---the kiss of death for any brand, but especially fashion labels whose success is dependent on the image it communicates to and about the wearer.

Can the Liz Claiborne brand resurrect itself? It's a tall order for any brand, not to mention a 30 year old fashion label. Creating a solid brand portfolio strategy is a very good start.

Liz Claiborne Inc (LIZ) holdings reduced by Becker Capital Management Inc

Liz Claiborne courting designers for overhaul

Brand Commoditization: 6 Ways to Prevent the Death of a Brand