Mixed performance for Liz Claiborne cosmetics

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Liz Claiborne has reported a strong final quarter for its financial
year 2004, but a mixed performance for its cosmetic revenues clouds
an otherwise good year for the US fashion house.

Net sales for the full year were $4.633 billion, an increase of 9.2 per cent on 2003, while net income came in at €314 million an increase of 6.8 per cent on the previous year. Likewise operating incomes were also up 6.8 per cent to $503 million, primarily reflecting a strengthening of the euro.

Wholesale non-apparel operating income for the full year, which also includes the company's fragrance sales, was up 11.2 per cent to $565 million. The company said that a significant proportion of this increase was contributed to by the re-launch of the Realities women's fragrance and core growth in the Curve fragrance.

However, for the crucial fourth quarter, which includes the Christmas and Thanks Giving holiday seasons, the company pointed out that sales of its cosmetics lines had been disappointing, dragging down an otherwise buoyant performance in the wholesale non-apparel division.

Despite the blip in the performance of its cosmetics lines, the company said that in its outlook for 2005 it is expecting that cosmetics will again be driving the results for the next 12 months. It is estimating that sales for the wholesale non-apparel division will grow by 6 - 8 per cent during the year, which is in line with forecasts for the group.

Speaking about the results, CEO Paul Charron said, "The retail climate is currently challenging, and we will continue to plan our businesses conservatively, focusing on solid execution and disciplined inventory management. For fiscal 2005, current visibility indicates that we forecast a sales increase of 6 - 8 per cent."

Liz Claiborne's​ cosmetic and fragrance lines include Bora Bora, Candie's, Claiborne, Liz Claiborne, Curve, Ellen Tracy, Lucky Brand, Mambo, Mexx and are distributed in Asia, the Middle East, Europe, as well as North and South America.

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