Claiborne sells Kenneth Cole stake

The US clothing concern Liz Claiborne has announced that it has sold its stake in the US footwear and clothing company Kenneth Cole. The sale is meant to cover fourth-quarter costs related to redundancies in the US and Europe.

New York-based Liz Claiborne has sold all of its 1.5 million shares in Kenneth Cole for around $12 million (GBP 6.5 million). All the proceeds from the sale will go to severance pays of $6 million to $7 million in Europe, when the Group terminates the Mexx catalogue business and centralises "decision-making and facilitates the management of a multi-brand platform."

The group is introducing a number of its brands to Europe and is using the Dutch fashion retailer Mexx, which it acquired in 2001, to do this. The company is also closing a US distributions centre in New Jersey. This will cost the group another $4 million and, according to US press reports, will cost approximately 200 people their jobs.

In a statement to the press, New York-based Kenneth Coles said that it had bought back 500,000 shares from Liz Claiborne for $13.9 million. This amount represents about 2.5% of the total shares outstanding.

Liz Claiborne acquired a stake in Kenneth Cole in 1999, when it made a licensing agreement with the company for its branded women's sportswear. Earlier this year, Cole ended the collaboration with Claiborne and sold the licence to the US clothing manufacturer Paul Davril. Davril already produces Kenneth Cole men's sportswear.

www.lizclaiborne.com www.kennethcole.com