Narciso Rodriguez, spring 2009
Liz Claiborne might break up with Narciso Rodriguez. After buying a 50 percent stake in the high-end label sixteen months ago, Liz Claiborne is reportedly at odds with Rodriguez over how to grow his brand, and so they're in talks to cut ties. It's like when you move in with someone, but you two can never find common ground about, say, dish soap, and it sends your relationship on a downward spiral. Or something. WWD reports that Claiborne thought it could turn Narciso's label into a $100 million business, or about eight times its sales, at the time of the deal. The contract didn't include plans for a diffusion line, but Fortune reports that Claiborne wanted to plow ahead with new licensing deals and lower prices to increase the label's customer base — not quite Narciso's high-end vision. And now the Narciso label could lose $8 million to $15 million this year, so getting out of the deal is looking like a better and better option for Claiborne.
Fortune reports that Rodriguez and Claiborne didn't get along from the start, and WWD dubs Narciso a "notoriously difficult designer" so this isn't terribly shocking news. But what does it all mean for both parties? Narciso can buy back Claiborne's stake probably for less than the $12 million they paid for it. But — and this is a big "but" — he's having trouble finding an investor, which is especially tragic on the heels of a spring 2009 show that left critics, actresses, and us wiping drool off our chins. For Claiborne this looks like a failed attempt to move away from the middle market. And we'll give you one guess as to how their stock is doing.