Apparel and accessories maker Liz Claiborne Inc. has hired Isaac Mizrahi as its creative director for its namesake brand in a bid to rejuvenate its foundering and aging label.
By signing on with Liz Claiborne, the award-winning designer is also ending his contract with Target Corp. He had created the powerful Isaac Mizrahi for Target collection, which has been a magnet in driving customer traffic to its stores and helped solidify Target's niche in cheap chic designs since its inception five years ago.
Mizrahi's first women's collection for Claiborne, to arrive in stores for spring 2009, will appeal to the same customer, but will be updated with bold colors and have a better fit, attributes for which the label had once been known, Claiborne officials said. They declined to comment on the terms of Claiborne's agreement with Mizrahi and said Mizrahi's arrival date at the company hasn't been determined.
In a separate statement, Target said that the Mizrahi collection will continue to be available exclusively in select Target stores and at Target.com through the end of 2008.
The news was seen as a big blow to Target, which in the last few months has stumbled amid disappointing sales.
"This is a big win for Liz Claiborne and a big loss to Target," said analyst Jennifer Black. "Of all the people they could have chosen, they couldn't have chosen someone better."
Mizrahi's marketing prowess has made him a household name. He is the host of his own show on Oxygen Network and the Style Network, and in February he will launch his new Web-based series "WATCHISAAC" at www.watchisaac.com.
"It is certainly no secret that the brand has been lacking a clear and cohesive vision and has languished as a result," said Claiborne Chief Executive William L. McComb. "With this appointment, we are taking a major step towards our goal of creating irresistible product that will provide today's discerning woman with a compelling reason to buy."
In a statement, Trish Adams, senior vice president of merchandising of Target said: "We've had a great partnership with Isaac.... Like our partnership with Isaac, all of our designers including our GO and limited-edition accessories designers help Target make great design available and accessible to everyone."
The announcement marked the latest move to transform the apparel company, which like its rivals is facing changing customer tastes and a consolidated department store customer base. Liz Claiborne announced in July that it was undergoing a major fashion makeover, pegging its future to fewer but more powerful brands with names like Juicy Couture and Lucky Brand Jeans.
Tim Gunn, the former chair of the fashion design department at Parsons The New School for Design and the mentor-in-chief on Bravo TV's "Project Runway," joined Claiborne last year as chief creative officer for the entire portfolio of brands, acting as the liaison between management and design. He is not directly involved in creating products, however.
The Mizrahi appointment doesn't affect Gunn, a company spokeswoman said.
In October, Claiborne reported a 65 percent profit in its third quarter due to hefty charges and a drop in sales in the company's partnered brands division, which included Liz Claiborne brands, DKNY Jeans group, and its cosmetics brands. Revenue fell 4 percent to $1.26 billion from $1.31 billion in the third quarter of 2006.
The partnered brands were slated to generate about $2.8 billion in revenue in its fiscal year.
However, the death of its namesake founder last June created an unexpected opportunity for the Claiborne brand. In a phone interview late Tuesday, McComb said the company received many calls from customers wanting to know who would replace the designer, not knowing she had left the company in 1989.
"This showed the power of the brand," he said. "It created a perception of a void."
The company started talks with Mizrahi in October, McComb said.
"It's no secret that the line hasn't been performing," he said, noting that Isaac Mizrahi is an "incredibly cultural relevant designer, and this is a brand that needed a cultural relevance." As the creative director, Mizrahi will oversee the design and marketing for women's apparel, accessories and licensing.
McComb said the brand will refer to Mizrahi in its hang tags but wouldn't comment on its marketing plans or sales potential.
Shares of Liz Claiborne, which also owns the Maxx and Kate Spade names, fell 5 cents to $16.35 in electronic after-hours trading. During regular trading, shares fell 56 cents, or 3.3 percent, to close at $16.40.
Target shares fell 47 cents to $49.40 in electronic after-hours trading. During regular trading, shares fell 62 cents, or 1.2 percent, to close at $49.87.