Eujinc

Pricing of GE and Liz Claiborne Stocks: Insaaane!

This company has lost its direction. Although focusing on the 4 key brands, Juicy Couture, Kate Spade, Lucky Brand and Mixx, I have had several reports from friends in the fashion business indicating that the products from one of their diamond brands, Juicy Couture are indeed falling apart. Quality control issues are at stake. To retain customer loyalty and credibility, it all begins with the product. If the product is falling apart, there will be returns and thus a loss of credibility among loyal customers. Sounds to me that they did not do a good job in research with their vendor partnerships in China.

The CEO is also too ambitious with his plans for expansion of specialty stores for these remaining 4 brands in a gloomy climate of retail. He may be shooting himself in the foot by expanding too quickly in a risky retail market already injured by the effects of the real estate crisis.

In addition, a large chunk of their troubled brands will not fetch a good price in a risky retail climate today. Who would want to buy these brands knowing a tough challenge in retail today? I smell great bargains on the troubled brands for the desperate Liz.

I would prefer to hear the CEO's plans for restructuring in management issues including quality control issues for their key brands. It all begins with the product. If your product is falling apart, why are you focusing on expansion in an unforeseen risky retail market instead of focusing on the quality of your products and management issues.

This company does not reward its employees and there is little room for climbing the corporate ladder within Liz. A hint for the CEO, follow the model of Nike. I forecast the stock to be $15 or less by the 1st quarter of 2008.