Fifth & Pacific shares jump on report of sale
Shares of Fifth & Pacific Cos. jumped to a 5-year high Wednesday on a report that the company formerly known as Liz Claiborne may be exploring the sale of two of its brands.
THE SPARK: The Wall Street Journal reported that Fifth & Pacific is considering a sale of Lucky Brand and Juicy Couture brands. It cited people familiar with the situation who weren't identified. The report said that financial firms Perella Weinberg Partners and Centerview Partners have been discussing a sale of Lucky and Juicy with potential buyers in recent weeks to gauge interest.
A Fifth & Pacific spokeswoman said the company does not comment on market speculation or rumors. Perella declined to comment. A representative for Centerview did not return a phone call seeking comment.
THE BIG PICTURE: The company has sold off the weaker parts of its business over the past few years, including the Liz Claiborne line, to cut debt and focus on improving its remaining and more contemporary brands. A sale of Lucky and Juicy would leave Fifth & Pacific with just one major brand, the popular accessories maker Kate Spade.
Fifth & Pacific posted a loss of $74.5 million for its 2012 fiscal year versus a loss of $171.1 million in 2011. Its revenue for the year fell to $1.51 billion from $1.52 billion.
Kate Spade is the company's fastest-growing brand. Juicy revenue fell 4.4 percent to $154 million last year, while Lucky revenue was flat at $137 million. Revenue from Kate Spade increased 57 percent to $173 million.
SHARE ACTION: Fifth & Pacific rose $1.42, or 7.6 percent, to close at $20.03. The stock peaked at $20.38 earlier in the session, at the highest point since 2008. Shares have traded as low as $9.02 in the past 12 months.