Part IThe Story
Is Liz Claiborne for Real?
Some days she worked the floor. A slight woman with cropped black hair and glasses so large that one reporter called them goggle-size would stand among the racks of a department store as if she were on staff, hand a jacket or a skirt to a stranger, and ask what she thought of it. The clothes had the woman's name sewn into the collar. The stranger did not know that the person asking was the name. That was the point.
The accounts don't say which stores, how often, or what she did when a customer held a blouse to her chest in the mirror and frowned. They record only that she did it. By the middle of the 1980s she was the most commercially successful women's designer in the United States. Her company would become the first founded by a woman to make the Fortune 500, and she would become the first woman to serve as chairman and chief executive of a company on that list. She still sometimes chose to stand on her own sales floor as an employee of no particular rank and listen to women who had no reason to be polite to her.
On December 8, 1985, The Washington Post ran a profile by Nina Hyde under the headline "Liz Claiborne, The Undesigner." It opened with a question that sounds rhetorical until you have read enough about her to take it literally: Is Liz Claiborne for real? She had been in Washington and had, Hyde reported, said "some remarkably undesignerlike things about herself and her clothes." The same season, Esquire's January 1986 issue carried Adam Smith's "Unconventional Wisdom" column on her, "How Liz Claiborne Designed An Empire," with a deck that drew the paradox exactly: With an eye for style and a nose for profit. Fashion writers were not sure what to do with a designer who talked like a merchandiser, and business writers were not sure what to do with a merchandiser who could draw.
The question had a sharper edge than Hyde intended. In the moderate-priced sportswear business Claiborne was entering, many of the labels were fictions. Evan-Picone, Ellen Tracy, Susan Bristol: Jerome Chazen, one of her three partners, would later point out that these were made-up names, signatures with nobody behind them. Liz Claiborne was a real person, and her partners counted that as a competitive weapon. A real name made a moderate-price label look like a designer label. It promised that a particular woman had looked at the garment and approved it.
That woman was shy. Chazen said so directly: she disliked public appearances. A Los Angeles Times writer who interviewed her in September 1986 found "a kind of Katharine Hepburn quality about her — a smart, straight-forward manner and an angular attractiveness that doesn't translate in photographs." She had built a brand on her own name and did not much enjoy being looked at. She preferred to be the one looking.
The arithmetic of what followed is almost too neat. She started the company in 1976 with $50,000 of her own and her husband's savings. Thirty-five years later, in October 2011, the company sold her name to J.C. Penney for $267.5 million so it could pay down debt. Within months it went looking for a new name for itself, and the New York Post proposed "Lucky Kate? Juicy Luck? Lucky Juice?" By 2014 the corporation she founded was called Kate Spade & Company, which, as it happens, also carried a real woman's name.
So the question keeps returning. Was Liz Claiborne for real? She was born Anne Elisabeth Jane Claiborne. In some corporate records she appears as Elisabeth Claiborne Ortenberg. The label carried her father's surname, and with it the surname of a Louisiana governor from the War of 1812. And there was, for at least one afternoon long before any of this, a girl in a car in Manhattan with fifty dollars.
By the Numbers
The Claiborne Ledger
$250,000Starting capital in 1976, $200,000 of it borrowed from friends and relatives
35Interchangeable pieces in the first collection
$116.8MSales in 1981, the year the company went public
1/3Share of the U.S. upscale women's sportswear market by 1988
$2B+Annual sales by 1991
$40M+Grants from the Liz Claiborne and Art Ortenberg Foundation by 2005
$267.5MPrice J.C. Penney paid for the Liz Claiborne name in 2011
Fifty Dollars and Good Luck
She spoke French before she spoke English. Her parents were American. Her father, Omer V. Claiborne, was a banker for the Morgan Guaranty Trust Company and was posted in Brussels, where she was born on March 31, 1929. Her mother, Louise Fenner Claiborne, taught her to sew. Her father took her to European museums. Those two inheritances, the needle and the gallery, worked against each other for most of her life before she found a way to combine them.
The family name came with a past. An ancestor, William C. C. Claiborne, had been Louisiana's first governor after statehood and held office during the War of 1812. Summers meant relatives in Baltimore and New Orleans. In 1939, with Europe moving toward war, the family left Belgium for its home in New Orleans. One reference work puts it plainly: they fled the Nazis. She was ten.
What came next was not a conventional upper-class American education, and it was not supposed to be. Her father, several sources say, did not think his daughter needed one. She went to St. Timothy's School for Girls, a small boarding school in Maryland. The family then moved to Mountain Lakes, New Jersey, "down the road from Morristown," as she later put it to her husband for his book about her, and she attended Mountain Lakes High School without graduating. "I did sort of go through primary and secondary schooling," she said, "though only until my sophomore year." Her father sent her back to Europe to study painting in the studios of Brussels, Paris, and Nice. The records list a Fine Arts School and Painters Studio in Belgium in 1947 and the Nice Academy in 1948. Her parents expected an artist.
She wanted to make clothes. In 1949 she entered the Jacques Heim National Design Contest sponsored by Harper's Bazaar with a sketch for a woman's coat, and she won. Her parents objected to fashion as a career. They also objected, the Guardian noted in its obituary, to her cutting off her long hair. She did both. The cropped black hair that photographers would later treat as a trademark started as a refusal.
Then the story that every obituary tells and none can quite source, which the Daily Telegraph introduced with the honest phrase the story goes. She and her father were driving through Manhattan. She told him she was staying. He stopped the car, gave her fifty dollars, and told her good luck.
It is hard to tell whether he was letting her go or calling her bluff. Fifty dollars was not a stake. It was a test, or a blessing given grudgingly, or the most a banker would offer a daughter who had just rejected his plans for her. She never seems to have described it as a trauma, and she never seems to have turned it into a bootstrap fable either. It sits at the start of her working life the way a single button sits on a cardigan: small, functional, holding everything else closed.
Twenty Years in the Backroom
The garment district in 1950 was the center of the world for ready-made sportswear, and the job open to a twenty-year-old woman with a design prize and no diploma was sketching. Claiborne sketched and modeled for Tina Leser, a sportswear designer who sold Americans on the idea of clothes for living rather than clothes for display. She was a design assistant to Omar Kiam, a former Hollywood costume designer who had moved to Seventh Avenue. She designed for the Dan Keller label and for Juniorite. The New York Times summarized the period in one unsentimental phrase: twenty years "in the backrooms of Seventh Avenue sportswear houses," making "peppy dresses."
Her private life during these years was as untidy as her working life was steady. She married Ben Schultz, a book designer at Time-Life, and had a son, Alexander. She kept working after he was born, which in the early 1950s was a choice. In 1954, at another sportswear job, she met Arthur Ortenberg.
Ortenberg was born in 1926. He had served in the military with a New Yorker named Jerry Chazen, and the two later roomed together at the University of Wisconsin in Madison. By the time he met Claiborne he was a textile executive, a man who understood cloth as cost per yard and lead time as well as color and hand. Different sources call him a textile titan, a design executive, a clothing manufacturer, a consultant. He was fluent in the business side of the rag trade, which she was not yet. Both left their marriages. They married in 1957, and she gained two stepchildren, Neil and Nancy, to raise along with her son.
Years later, with his wife sitting next to him, Ortenberg told Women's Wear Daily that a husband-and-wife business partnership "works particularly well with second marriages." She had said a moment earlier, "I think it works beautifully." The line sounds like a quip. It also reads like an admission that two people who had already broken one set of vows knew how much depended on keeping the next.
In 1960 she joined Youth Guild, the junior dress division of the large apparel manufacturer Jonathan Logan, as its chief designer. She stayed fifteen or sixteen years, depending on the source. The work was dependable and paid. It was junior dresses, peppy and youthful, for a market that assumed a woman's wardrobe was organized around being young and then being married. Around her, that assumption was breaking down.
She saw it. CFDA's account, the Hall of Fame entry, and the company histories all describe a designer who could see women going into offices in growing numbers and could see what was being sold to them. The Guardian described the choices with some cruelty: mass fashion assumed women "were willing to go to the office dressed up as if for a disco night," and the main practical option was "a modified air-hostess look, neat yet dumb." She pitched the idea to her employer: stylish, sporty, affordable clothes for women who worked. Her employer was not interested.
She did not leave immediately, and this matters more than the founding legend admits. The Guardian and MoneyWeek both report that the couple "dared not risk the family savings until the children had finished college." Then Jonathan Logan closed the Youth Guild division. In Chazen's account, Claiborne "had just been told that the company where she had worked for 15 years was closing." She was in her mid-forties, she had been in the backroom for two decades, and the decision about her job had been made for her.
I Think I Am That Woman
Who had the idea depends on who is telling it.
In the version on the company's own plaques and in the obituaries, Claiborne saw a gap her employer refused to fill and left to fill it. In the version Jerome Chazen gave the Wharton School in 2012, after the others were dead or retired, the idea of coordinated separates sold to working women through department stores was his. "I think it was my idea," he said. "I was always very interested in the consumer." He described the moment as a meeting of an idea with a person who needed somewhere to go: "It was an idea taking place at a time when Liz and her husband, but especially Liz, were looking for something else to do." They talked through the concept and the customer who fit it. Then, he said, Claiborne said: "You know, I think I am that woman."
Even in Chazen's telling, the founding sentence is hers, and it is a statement about who she was, not a business plan.
Chazen's own background explains why he wanted the credit and why he deserved some of it. He was born in New York on March 21, 1927. His mother, Rose, was a seamstress; his father, David, worked in commercial heating. He served in the Navy in 1945 and 1946 and then went to Wisconsin on the G.I. Bill, because, he said, it was progressive and cheap: out-of-state tuition of $100 a semester and $48 in fees, "which included basketball and football tickets and health coverage." He met his future wife, Simona Chivian, at a jazz record session he had organized. He also met Art Ortenberg. At Columbia Business School he earned one A, in marketing. He spent a short time as a junior analyst at Sutro Brothers on Wall Street, then a college friend, Alan Glen, persuaded him to come to Milwaukee and work at Rhea, the apparel company Glen's parents owned. One account describes Claiborne herself as "a fellow Rhea alum." After Rhea he spent sixteen years in retail, moving from Milwaukee to New York to Detroit and back. He was merchandising manager at Winkelman's in Detroit starting in 1960. "Paying my dues," he called it. A seamstress's son, a garment-district insider with an MBA, he knew the department stores from the buyer's side of the desk.
The fourth partner left the smallest record. Leonard Boxer was an industry executive and a friend, and he ran production, the unglamorous discipline of getting the right fabric cut into the right garments and delivered on the right day. He retired in 1985. Every account lists him, and almost none quote him. Fashion companies tend to remember people that way.
The capital was modest even for 1976. The partners put in $50,000 of savings, most of it Claiborne's and Ortenberg's, and borrowed $200,000 from friends and relatives, for about $250,000 in all. The Guardian dates the incorporation to January 18, 1976; Women's Wear Daily later said February. Claiborne was forty-six and Ortenberg forty-nine. WWD observed drily that some people at that age "might flirt with the idea of winding down their careers and buying a retirement home in Florida." Chazen could not join right away. He had to "shore up his finances" at his existing job first and came aboard in 1977.
The titles inverted the usual arrangement. Claiborne was president and ran design. Ortenberg, the one who knew finance and would go out and raise money, was named corporate secretary, and later treasurer as well. The Times called it "an apt reversal of roles." In 1976 a man with a secretary's title at his wife's company was a joke someone was choosing to make.
— Liz Claiborne, to Women's Wear Daily, 1989I wanted to dress busy and active women like myself, women who dress in a rush and who weren't perfect. But loving clothes, I knew clothes could do a certain thing for you from a flattering point of view. And I tried to bring good taste to a mass level.
Her description of the customer was not aspirational. It was, nearly word for word, a description of herself: a working woman with a child who did not want to spend hours shopping. "Things should be easy," she said. In 1976 she gave WWD the exact budget: clothes for "active, young-minded women who want to put themselves together for under $150." She added a principle as plain as a price tag: "I try to eliminate gimmicks so that the clothes are affordable."
There had been fifty dollars in a stopped car. Now there was $50,000 of savings in a company and a customer who could buy a complete outfit for a hundred and fifty. The numbers had grown, but they were still the numbers of someone who knew what money was worth.
The Tyranny of the Skirt Department
Before you can see what she changed, you have to see the uniform she was working against.
Clothes for women at office desks had been mass-produced in Manhattan since the 1890s. That was when, as the Guardian told it, someone crossed a man's shirt with a woman's dress bodice and produced the shirtwaist blouse, which with a sturdy skirt and a tailored jacket dressed several generations of clerks and typists. By the mid-1970s the professional woman's choices had narrowed again. John T. Molloy's Dress for Success told businesswomen, in Robin Givhan's summary, to dress "like slightly curvier men in gray flannel suits and floppy ties." The Times described Claiborne's view of that look as "the bland re-interpretation for women of a man's navy blue suit and tie," a phrase she reportedly delivered irritably. "Blouses that closed with frilly bows did not appeal to Ms. Claiborne." The Brooks Brothers blouse with a bow was the costume of a woman trying to pass.
Her alternative went back to the principle behind the original shirtwaist: feminine fabric and color with masculine simplicity of use. In her own words to WWD, the clothes were "businesslike, but not too pinstripe, more casual, more imaginative, less uptight." The first collection had thirty-five pieces, all meant to work with one another. It was a system you could buy, not a set of outfits. One of the earliest designs, a velour peasant blouse, sold 15,000 pieces in one season. First-year sales were somewhere between $2.1 million and $2.6 million, depending on the ledger, and the company made a profit in its first year. Very few apparel startups do.
But the clothes ran into a building.
The American department store in 1976 sorted women's apparel by type. In Chazen's words, there was "a separate blouse department and they had a skirt department and they had a sweater department and so on, none of which were coordinated, all of which were bought by separate buyers." A collection of thirty-five coordinated pieces had nowhere to go on the floor. Worse, it had nobody to buy it, because no single buyer was responsible for an outfit. The store's layout matched its organization chart, and both assumed a woman bought a skirt in one place, a blouse in another, and assembled a self on her own time, if she had any.
So they went to the stores and asked them to change the floor. Chazen called it breaking the rule of "this is the way we do business in our store." His summary of the pitch could pass for founder bravado: "Well, this is the way we do business, and I think you're going to have to accommodate us." Then he corrected it, which is the more useful part. "It sounds a little arrogant; it wasn't. It was a lot of begging and pleading that went along with it." A few stores agreed to test the idea. Customers liked it. Word spread among retailers. And then, as Chazen put it, "we went through a period of a number of years where our biggest problem was producing enough merchandise."
What the begging produced was the brand-specific area inside the department store: one label's full range hung together, so a woman could put an outfit together in one place, by name. Wikipedia's account, drawn from a history of retail fixtures, calls it the first time customers could select many kinds of clothing by brand alone in a single part of a department store. That arrangement is now so common that it is hard to picture a store without it. In 1987 the first official Liz Claiborne in-store shop opened at Jordan Marsh in Boston. That same year the company began "Project Consumer," putting company-trained "in-store specialists" on the floor, a system for doing at scale what she had been doing personally in disguise.
She understood what the stores had lost and why. "If you go on the designer floor, you can get help," she told WWD in 1984, "but if you go on our floor, the better or mass floor, there's no service. Help costs money. That was the first economy stores made. The stores have become self-service. Women need guidance, but they will take it in different ways." Her answer was to put the guidance into the merchandise and the fixtures: visual displays, videos, mannequins, a rack arranged so that it showed you how to dress.
The calendar changed as well. The industry worked in four seasons. Liz Claiborne shipped new merchandise every two months, six times a year. The company's own descriptions emphasized phrases like "mix-and-match" and "from work-to-evening," which later became retail clichés. MoneyWeek noted that this was itself a sign of her success: the categories she invented became so standard they lost any sense of having been invented.
It also changed what women wore below the waist. "We came into the business in 1976 when the main mode of dress was in fact a dress," Chazen said. The company made separates instead: skirts, pants, blouses, sweaters, jackets. It helped make pants a normal part of a working wardrobe. Claiborne wore them herself. The Los Angeles Times listed her personal uniform as short-cropped black hair, goggle-size glasses, "a penchant for pants, T-shirt and a blazer." She was a working mother dressed the way she wanted her customers to be able to dress.
Then there was the price, which was what actually made it work. Givhan identified it in her obituary: the clothes "were priced so that both the executive and her secretary could afford them." The same racks served the woman in the corner office and the woman at the desk outside it. In the company's own office, the corporate secretary was the founder's husband.
Plants in New Jersey
The second rule they broke was about factories, and on this one Claiborne was not the person pushing.
"When we founded Liz Claiborne, it became rapidly obvious we would not find sufficient factory space in this country to make garments at the price and quality we needed," Chazen said. He proposed going overseas. According to Columbia Business School's account of his own recollection, Claiborne was horrified.
— Liz Claiborne, as recalled by Jerome ChazenWe can't even manage our plants in New Jersey.
It was a fair objection. The company owned no factories. It depended entirely on contractors, and a designer who had spent twenty years in Seventh Avenue backrooms knew how far a garment could drift from the sketch by the time it reached a loading dock. Moving production across the Pacific meant trusting her standards to people she might never meet, in a language she didn't speak, on a schedule set by ships.
Chazen went ahead anyway. The company began testing overseas production in 1977 and opened a Hong Kong office in 1978. Within roughly a year, by Chazen's account, all of its clothes were being made abroad. Harvard Business School's case on the company describes what made this possible: because Liz Claiborne owned none of its factories, Claiborne "relied upon her detailed understanding of design and manufacturing processes to instruct successfully her American and offshore contractors on how to mass-produce designer clothing at affordable prices." Another HBS case, from 1990, studied the company's relationship with Ruentex Industries, a Taiwanese manufacturer. The supply chain was important enough to justify academic study.
Her horror and her eventual skill came from the same place. She was worried precisely because she knew what could go wrong between the pattern and the finished garment. That knowledge became the control mechanism, written into specifications, fit standards, and an insistence that whoever was cutting the cloth understand why each seam was where it was. The asset-light model wasn't a way around manufacturing expertise. It required more of it.
Ortenberg approached the operation like a textile man watching costs. "There is an immediacy about our company that we don't want to lose," he told WWD in 1977. "We want to keep it as simple as possible — that's why we have avoided computerization." The same year, on money: "Dynamic growth has to be financed properly. We are capitalized properly through the efforts of private investors and the firm's partners, who own a good percentage of the company. We have to stay within certain cost parameters for efficient and professional growth." For a company that would grow faster than almost any other in its industry, the founders talked a lot about restraint.
The offshore decision shows up thirty years later in an unexpected place. In 2008 the company's then-CEO tried to hire Narciso Rodriguez, a celebrated designer, to revive one of its labels. Rodriguez, the New York Post reported, "balked at the idea of mass-producing his fashions at Chinese factories." By then the model Claiborne had argued against and then perfected had become the company's identity, and an artist with his own name on the line didn't want it.
A Glass Bell, an Alphabet, a Red
She ran meetings by ringing a glass bell.
That detail, reported in The Economist's obituary and repeated everywhere since, works because it is both odd and practical. It is quieter than shouting and harder to ignore than a raised hand. A shy woman who disliked public speaking had found a way to bring a room to order without raising her voice.
The company directory listed every employee alphabetically by surname, with no ranks or levels and no indication of who reported to whom. The Economist said she did it to get around what she saw as male hierarchies. The Global Business Hall of Fame put it more blandly: so "as not to give anyone preference according to hierarchy." In practice, the founder and a warehouse clerk appeared under the same rules, sorted by letter. This was a woman who had spent twenty years answering to men in companies where the order of names on a page meant something, and she took that away.
She did not get rid of authority. She kept it for herself. "I hold final veto power," she told WWD in 1984, and the rest of the statement deserves quoting in full:
— Liz Claiborne, to Women's Wear Daily, 1984I hold final veto power. It can be a little difficult on the designers to work for this company, because they have to throw out some of their good ideas that just aren't mine.
The candor is almost funny. She doesn't claim the rejected ideas are bad. She says they're good and they're getting thrown out because they aren't hers. The directory was alphabetical. The taste was not up for a vote. In 1986 she described her rounds to WWD: "I sit in on all the initial, medium and final line planning meetings. I look at every sportswear garment that goes out of here. I keep more of a distance from dresses, girls' and men's." Every sportswear garment. By then the company was selling hundreds of millions of dollars' worth a year.
She expected the work to match. "Designers used to be notorious for coming in late, leaving early and taking long lunch hours. Not any more," she said in 1984. "Designers today work like hell."
And there was red. Insiders called it "Liz Red," and it became known as hers. She liked color in a way that set her apart from the navy-and-gray professional uniform: color as a statement, inside a cut that was basically conservative. A Los Angeles Times customer in 1989 described a shopping trip as a list of colors and textiles: linen skirts "in yellow, tomato red, purple, black, white," with coordinating floral-print blouses, a navy-and-white plaid skirt and jacket with "beautiful" gold buttons.
For someone so rigorous about operations, she could be oddly mystical. When the company launched its first fragrance in 1986, a joint venture with Avon, she said the bottle's triangular shapes and its red, yellow, and blue scheme were chosen "for somewhat mystical reasons." "It has to do with numerology and my astrological sign (Aries)," she said. "I'm a great follower of all that. The color yellow has always been important to me. It's a color that always makes you smile."
The launch strategy that went with this was anything but mystical. The industry introduced fragrances through a few prestige counters and sold them with sex. She gave away nine million samples and shipped to every store that did well with the clothing lines and would give the fragrance space. The advertising showed a model leaping in a clean white sweat suit. "We're not a status, snobbish kind of company at all," she said. The ads avoided seduction for a reason she spelled out: she didn't want to suggest "you'd have this wonderful guy leaping at you if you wear Liz Claiborne. I'd rather appeal to a woman's idealistic version of herself." She would choose a bottle by astrology and then distribute it like a consumer-goods company. The tension between those two impulses is what made her hard to categorize, and it is why Nina Hyde asked whether she was for real.
The four partners had their own routine for keeping the company coherent. "We used to each do our job all day long and have dinner together at night to communicate what was going on so we all knew each other's area," Chazen said. Claiborne handled design, Ortenberg money, Boxer production, Chazen sales. During the day they worked separately; at night the four of them compared notes over dinner. By the time a company has a coordination problem, it usually has a meeting calendar to show for it. These four simply ate together.
Let's Run It by Liz
The growth was steep enough that the yearly sales figures read like a staircase.
$7.4 million in 1977. $23.3 million in 1978, the year of the Hong Kong office. $47.6 million in 1979, when the company took a whole floor at 1441 Broadway. $79.5 million in 1980, with three hundred employees. In 1981 the company went public on NASDAQ under the ticker LIZ, launched a petite division, and reported $116.8 million. Dresses followed in 1982, along with the first licensed shoes. In 1983 came products for the home, the first outlet store in Secaucus, New Jersey, a thousand employees, and $228.7 million. Lizkids girls' sportswear in 1984: $391.3 million. Menswear and the denim-influenced Lizwear in 1985, along with eyewear, the Avon fragrance joint venture, and Boxer's retirement: 2,100 employees, $556.6 million. The company moved into offices in North Bergen, New Jersey, in 1986. Sales passed a billion dollars in 1987, which a New Jersey business paper said no women's apparel company had done before.
Then the honors. The company made the Fortune 500 within about a decade of its founding, the first company started by a woman to do so. Harvard's case study says it got there faster than any business before it. In 1986 Fortune ranked it second among America's Most Admired Corporations, behind only Merck. In 1989 the magazine reported that over the 1980s Liz Claiborne had earned the highest return on year-end equity of any industrial company in the Fortune 500. By 1988 it held one-third of the American market for upscale women's sportswear. Claiborne, already president, was elected chairman and chief executive in 1986 or 1987, depending on the source, which made her the first woman to hold both positions at a Fortune 500 company.
Ortenberg called the customer base "an exploding market," the millions of women who graduated from college and went to work in the 1980s. Chazen was more careful about how much foresight to claim. "I can't tell you we were smart enough back then to say, 'American women are about to join the work force in record numbers, and they're going to need something to wear,'" he told the Times in 2007. "We saw a niche." In Fortune he put it another way: "What we didn't know was how many customers were out there."
The company also produced designers who went on to their own careers. Nina McLemore, an employee, founded Liz Claiborne Accessories in 1980, starting the business that took the name beyond clothing. Decades later, in 2001, she started her own label, which the Wall Street Journal would describe as the one powerful women knew. Dana Buchman, a Liz Claiborne designer, got her own label inside the company in 1987, which moved the company up into the higher-priced "bridge" market. Lisa Hayes ran the dress division from 1988 to 1995 and later wrote a history of the company for the Business History Conference. She summarized Claiborne's insight as a woman's: she "sensed a missed opportunity to dress women who did not have to wear suits to work." All three were women promoted inside a company built around a woman's taste. Each eventually had a name on a label, or a byline.
None of them were Liz. That was what made all of it possible, and it was also the growing problem.
Years after she left, sitting in a gray turtleneck and blue-tinted glasses in the couple's Fifth Avenue apartment, she told WWD why she quit. "I couldn't take it anymore. I was supervising 32 designers and spending my time on the elevator going from one floor to another." Ortenberg, in jeans and a white button-down shirt, added the phrase that explains it: "Everybody would say, 'Let's run it by Liz.'" "It had gotten so big," she said.
The woman who once looked at every sportswear garment was now a bottleneck that moved between floors, and the company that had been organized around her approval was large enough that the approval itself was the constraint. Ortenberg had seen it coming years earlier. "Our main concern is training capable people to replace us," he said in 1984. "We will measure our success according to how much less we can work in the future and how much we can delegate to new, capable managers."
They spent two years preparing successors. In the spring of 1989 she addressed the board and the stockholders.
— Liz Claiborne, to her board and stockholders, spring 1989I have done what I set out to do. I thank you all for having been, with me, part of a grand adventure.
In June 1989 she and Ortenberg retired from active management. She was sixty. Chazen became chairman. Sportswear design went to Robert Abajian, a longtime friend, whom she called "the new Liz of sportswear" and "an extraordinary amalgam of talent, integrity and professional know-how." The Los Angeles Times added a qualification that matters: Abajian "doesn't actually design. He oversees, as Claiborne did for a number of years, six sportswear designers and their staffs."
Abajian insisted the founders weren't really gone. "Liz and Art are still members of the board," he said. "I think we're more aware of their presence than ever." A retailer interviewed for the same story made a comparison the company might have liked, and probably should not have. After she left, he said, she would be like the mythical Betty Crocker: "Women will continue to feel she's there, looking after them."
Betty Crocker was never a real person. She was a name and a face invented by a company to stand for a trustworthy woman in the kitchen. The retailer meant it as praise. The company's founding advantage had been that, unlike Evan-Picone and Susan Bristol, Liz Claiborne was real. Within a few months of her departure, someone who sold her clothes was already describing her as a myth.
The Customer Stopped Waiting to Be Told
For a while the machine ran on its own. Chazen expanded into footwear and jewelry. Sales passed $2 billion in 1991 and reached $2.2 billion in 1992. Fortune placed the company fourth among its most admired in 1992 and eighth in 1993. Then the stock fell sharply enough that a New Jersey business paper ran the headline "Liz Claiborne Gets Mugged On Wall Street," citing lower earnings and the departure of two important executives.
The problem had started in 1992, and in hindsight people described it with a phrase that would have stung Claiborne: They weren't listening to the customer. Jennifer Black Groves, a Portland brokerage executive, said that to the Los Angeles Times in 1995. It was the reverse of what Claiborne said when asked how she had built the business: "I listened to the customer."
Paul Charron, who became CEO in 1995, gave the clearest explanation of what had changed. "Before, women wanted to be told what to wear, how to dress," he said. "Today, women want to be shown their options, so they can put their own individual stamp on what they appear to be." The women who went to work in the 1970s and 1980s had needed a uniform, and Claiborne gave them one that didn't look like a man's. Once they were established, they wanted more choice. Younger women wanted more variety and more freedom to dress casually at work. The career-clothes system had been built to answer a question a generation of women no longer needed to ask.
Customers noticed. The core office line, Collection, and the casual lines, LizSport and LizWear, had become too similar. "People come in here and say, 'I want something new,'" a Claiborne specialist at a Broadway store in the Glendale Galleria said. A longtime customer from Sunland, California, Evelyn Faruzzi, made the most revealing comment: "You'd go into a store and you wouldn't even have to see the label, you'd know it was theirs." Ten years earlier that would have meant the brand was working. In 1995 it was a complaint.
Nicolaj Siggelkow, a Wharton professor, wrote the most useful analysis of the decline, a 2001 paper in the Academy of Management Journal titled "Change in the Presence of Fit." He argued that Liz Claiborne's success came from a set of choices that reinforced one another: in design, in how merchandise was presented, in how it was sold to retailers, in marketing, and in production and distribution. Collection design required collection display. Collection display required selling to a store's floor rather than to its separate buyers. All of it required production that could deliver whole coordinated groups on time. Each choice made the others work better. "Firms can have systems that have wonderful internal fit," he said, "but that might be totally inappropriate for the environment they're in." The danger he identified was the kind of change that leaves a company's internal logic intact while making it wrong for the market. Everything inside still fit together. It just no longer matched the customer.
The founders' tightly connected design was also what made it hard to change. Her controls, her veto, her calendar, her collection logic were all built to deliver one consistent woman's taste to one kind of customer through one kind of store. Other forces were working against the company at the same moment: the early-1990s recession, weak spending on women's apparel, more competition, department-store mergers and bankruptcies that reduced the number of doors. But the deepest problem was coherence, and coherence had been the company's main strength.
Later, Ortenberg conceded one specific mistake, and it wasn't about the clothes. He told WWD he wished the Liz Claiborne brand had had "controlled distribution" and hadn't been sold so widely. They acknowledged that during their tenure the brand became oversaturated in department stores and lost its point of view. Elsewhere in the same interview, he said they "got out at an extraordinarily good time."
Charron was a former Procter & Gamble brand manager, an outsider to fashion, and he had a dry sense of humor. When a man on the street eight floors below his office started yelling during an interview, Charron said, "That's one of our shareholders." His solution reversed the founder's approach. "We're not building museum pieces here," he told Forbes in 2002. He researched trends and sales data intensively and had about 250 designers execute what the data suggested. The company followed trends instead of setting them. Instead of extending the Liz Claiborne name into new markets, he licensed and acquired other labels: Lucky Brand Jeans in 1999, Mexx in 2001, Juicy Couture in 2003, Kate Spade in 2006, and Ellen Tracy, the made-up name Chazen had once contrasted with a real designer. The company was making 220 million items a year. Sales rose 66 percent to $3.4 billion in 2001, and the stock rose 228 percent during his tenure.
In a Macy's in Manhattan, Charron pointed out two teenagers going through racks of Kenneth Cole Reaction pants, a line his company produced, and whispered to the Forbes reporter: "If you told them Kenneth Cole was made by Liz Claiborne they would be out of here. The only people I want to know that are investors."
At the start, a real person's name was what set the company apart from labels with invented ones. Under Charron, that same name was something to keep from the customer.
The Price of a Name
By the time Claiborne learned she was sick, she had already spent nearly a decade on something else.
She and Ortenberg had set up the Liz Claiborne and Art Ortenberg Foundation in 1984, while they were still running the company. In retirement it became their main work. By 2005 it had given more than $40 million to conservation, wildlife, and education projects around the world, along with support for the PBS series Nature. The University of Montana later described the foundation's purpose in an inventory of losses: "species extinction, habitat destruction and fragmentation, and resource depletion." The couple had a large farm in Montana's Swan Valley, a house in St. Barth's, an apartment on Fifth Avenue, and a house on Fire Island, in Saltaire, which she bought in 1985 while the company was at its peak. A longtime neighbor wrote that Saltaire was where they "felt most at home, the place where they came to recover their spirits and peace of mind." She received an honorary doctorate in fine arts from the Rhode Island School of Design in 1991 and the CFDA's Lifetime Achievement Award in 2000. She taught at the Fashion Institute of Technology and at Parsons. In October 2004, in Missoula, the University of Montana gave her and Ortenberg its first Lewis & Clark Pioneer in Industry Award, which honored entrepreneurs "who started with modest resources." She had started with fifty dollars.
In May 1997 she was told she had a rare cancer of the lining of the abdomen. She lived with it for ten years. Robert Abajian, "the new Liz," had retired in 1994 and died in January 1995 at sixty-two.
In 2005 WWD reported that the Liz Claiborne brand still brought in $1.2 billion a year, but that was only 24 percent of the company's $4.85 billion. Several big stores had cut back on the line or dropped it. Charron retired in October 2006, and the board appointed William McComb, a Johnson & Johnson marketing executive who had never worked in apparel. The stock was $42.86 when he started.
Liz Claiborne died on June 26, 2007, at NewYork-Presbyterian Hospital. She was seventy-eight. Robin Givhan's appreciation in the Post two days later described what had happened to the company with careful restraint: Claiborne "built her fashion business by catering to the needs of working women. Over the years, the brand deserted them, as did much of the fashion industry. When Claiborne died Tuesday, at 78, her company was trying to woo them back."
Fifteen days after her death, on July 11, 2007, the company announced it would try to sell or license sixteen of its thirty-six brands, about $800 million of its $5 billion in revenue, and cut $190 million in costs. Among the brands up for sale were Dana Buchman, the label that had grown out of Claiborne's own design room, and Ellen Tracy. The company kept and planned to expand the brands with their own stores: Juicy Couture, Kate Spade, Lucky Brand, and Mexx.
Then came a series of high-profile attempts to revive the namesake. The company hired Tim Gunn, the host of Project Runway, as creative director; a source told the Post he was having "no impact whatsoever." In January 2008 it hired Isaac Mizrahi away from Target, reportedly at $6 million a year, to bring life back to the Liz Claiborne label. Mizrahi's version did not connect with the label's conservative, mostly Middle American customers. "The deal with Isaac did not work out like we hoped," McComb said. "Still, I'm thrilled that we did it." He admitted the operational problems he had inherited were worse than he expected. Jones Apparel, he said, "had three distribution centers and we had 12." A former executive told the Post: "From the very beginning, Bill had no respect for the Liz brand. He thought it wasn't cool enough anymore." By November 2009 the stock was at $5.30, down 87 percent.
In October 2009 the company announced that J.C. Penney would become the only retailer for the Liz Claiborne brand under a ten-year license, with an option to buy the name after five years. The more fashion-focused Mizrahi line would move to QVC. McComb's explanation was a precise description of a brand at war with itself: "It was time to break the conflict inherent in the strategy that had a lower-priced offering of the Liz Claiborne brand at one department store in the mall and a higher-priced version of it in a department store across the mall." Ortenberg had wished for controlled distribution. Now there was going to be exactly one outlet.
Penney didn't wait five years. In October 2011, with McComb under investor pressure to cut debt, Penney bought the domestic and international trademark rights to the Liz Claiborne family of brands for $267.5 million, sooner than the option required, because, a source said, McComb wanted "his cash sooner rather than later." The shares jumped as much as 42 percent that day. The company that had been the first woman-founded member of the Fortune 500 no longer owned its founder's name. On May 15, 2012, it became Fifth & Pacific Companies, Inc. It sold Juicy Couture for $195 million and Lucky Brand for $225 million, keeping only Kate Spade.
Jerome Chazen published his memoir, My Life at Liz Claiborne: How We Broke the Rules and Built the Largest Fashion Company in the World, in January 2012, while all this was happening. It is part history and part complaint about credit. He said his grandchildren had pushed him to write it. He also wrote that "Art always had difficulty giving me credit for the key role I played in the company," and that he liked to think of the company as "Liz's and Jerry's." WWD noted that "people who worked at Claiborne during that time may strongly disagree with that claim." He quoted Fox News on himself, fair and balanced, and seemed to know it was a joke. On what happened after he left he wrote, "All I can say is it's obvious the years have not been kind to Liz Claiborne." Ortenberg had published his own book in 2009, Liz Claiborne: The Legend, The Woman, first released by the Missouri Botanical Garden, a conservation institution printing a fashion designer's biography. Two men who had shared a room at Madison wrote two books about the same woman, each defending his own place next to her.
Art Ortenberg died in early February 2014. On February 25 of that month, Fifth & Pacific changed its name to Kate Spade & Company, and McComb's departure, WWD said, marked "the official end of the company's transformation from Liz Claiborne to Kate Spade." Three years later Coach, later renamed Tapestry, bought the company for $2.4 billion. Jerry Chazen, the last of the four founders, died at home in Upper Nyack, New York, on February 6, 2022, at ninety-four. Long before, he had given $10 million to found an institute of international business at Columbia, and the art museum at the University of Wisconsin had been renamed for him and Simona. He said an art history course at Madison was what first got him interested in art. He had been married to Simona for seventy-two years.
The Liz Claiborne name is still in use. It hangs in J.C. Penney stores, under license, on career clothes and casual clothes for women whom WWD's archive feature still called the label's natural customers: working women who want something affordable, easy to wear, and quick to pull out of a closet. Most of the women who buy it now have probably never heard of the woman, and they were never told she was real.
A long time ago, before the cropped hair became a logo and before Seventh Avenue, the elevators, the bell, the directory, the shop at Jordan Marsh, the Hong Kong office, and the stock ticker, a girl with a design prize and no diploma was riding through Manhattan with her father and told him she was staying. He stopped the car. He handed her fifty dollars and wished her luck.
Part IIThe Playbook
What follows are the operating principles that can be drawn from Liz Claiborne's career and from the company she built with Art Ortenberg, Jerome Chazen, and Leonard Boxer. Several of them only make sense alongside what happened after she left. A founder's playbook is tested partly by how it performed while she was in charge and partly by how it held up once she wasn't. In her case, the strengths of the first period were directly connected to the problems of the second.
The principles
- 1.Be the customer, then design for her closet, not your runway.
- 2.Change the shelf, not just the product.
- 3.Put a real name on the door, and understand it becomes collateral.
- 4.Build a system of reinforcing choices.
- 5.Fear the fit that still fits internally.
- 6.Own the knowledge, rent the factories.
- 7.Wait until you can afford to be wrong.
- 8.Divide by competence, reconcile at dinner.
- 9.Flatten the symbols, centralize the taste.
- 10.Go undercover in your own channel.
- 11.Refuse the status play when your customer doesn't want it.
- 12.Distribution is the brand; leave before your approval becomes the bottleneck.
L
From Backroom to Brand to Asset
The arc of the Claiborne name, from a design prize to a trademark sale.
1949
Claiborne wins the Jacques Heim National Design Contest sponsored by Harper's Bazaar.
1960
Joins Jonathan Logan's Youth Guild division as chief designer; stays until the division closes.
1976
Liz Claiborne Inc. founded with roughly $250,000; first collection of 35 interchangeable pieces.
1978
Hong Kong office opens; production moves almost entirely offshore.
1981
IPO on NASDAQ under ticker LIZ; sales reach $116.8 million.
1986
First company founded by a woman on the Fortune 500; ranked second among Fortune's Most Admired, behind Merck.
1989
Claiborne and Ortenberg retire in June; Chazen becomes chairman.
1992
Sales top $2.2 billion; the stall begins.
1995
Paul Charron becomes CEO and turns the company into a multi-brand portfolio.
2007
Claiborne dies June 26; on July 11 the company puts 16 of 36 brands up for sale or license.
2011
J.C. Penney buys the Liz Claiborne trademarks for $267.5 million.
2014
Company renamed Kate Spade & Company on February 25.
Principle 1
Be the customer, then design for her closet, not your runway
"You know, I think I am that woman." Whoever first proposed the concept, the company's founding moment was the founder recognizing herself in the target customer. She was a working mother who dressed in a hurry and didn't want to spend hours shopping. That wasn't a persona invented by a marketing department. It was her own schedule. She told WWD in 1986 that when she designed, she would close her eyes and picture the customer's closet: what was already there, and what was missing.
The discipline here is the closet, not the identification. A designer focused on the runway asks what will look striking. A designer focused on the closet asks what will work with the navy skirt the customer already owns. That question produced the company's key innovation, coordinated separates, because a closet is a system of pieces and the runway is not. It also explains why she resisted being called a trendsetter. Trends are designed for a show; a closet has to work across years.
The limitation is that a founder who designs for herself keeps designing for herself as she gets older, as the customer changes, and as a new generation arrives. Charron's diagnosis, that women had stopped wanting to be told what to wear, was partly about a customer who had moved on from the founder's own experience.
Tactic: Write a specific inventory of what your target customer already owns or uses, and design only what fills a gap in it.
Principle 2
Change the shelf, not just the product
The coordinated separates did not fit anywhere in the 1976 department store. The store was organized by type, blouses here and skirts there, each with its own buyer, so there was no place to put an outfit and no one whose job was to buy one. Most companies would have adapted the product to the store. Claiborne and Chazen pushed the store to adapt to the product: they persuaded retailers to move from "classification" to "collection" presentation, and then, step by step, to dedicate areas to a single brand.
Chazen's correction of his own story is the important part. "It sounds a little arrogant; it wasn't. It was a lot of begging and pleading." Changing a channel isn't done by announcement. It's done by convincing a few willing partners to run a test, getting results that customers respond to visibly, and letting retailers spread the word. The first official in-store shop at Jordan Marsh didn't open until 1987, eleven years in. Getting the floor redesigned took a long time.
The general point is that a product innovation that clashes with the channel's structure will be absorbed into the old categories and fail quietly, unless the founders treat the channel itself as something to redesign.
Tactic: If your product doesn't fit the channel's existing categories, design a small, measurable test with one or two willing partners, and use the results instead of arguments to change the layout.
Principle 3
Put a real name on the door, and understand it becomes collateral
Chazen said one competitive advantage was simple: a real designer stood behind the name. Evan-Picone, Ellen Tracy, and Susan Bristol were invented names. Liz Claiborne was a person who looked at every sportswear garment. A real name let a moderately priced label borrow the credibility of a designer label, a promise of someone's actual judgment.
But a person's name, once it becomes a brand, starts to separate from the person. Within months of her retirement a retailer was comparing her to Betty Crocker. Under Charron, the founder's name was something to hide from teenagers at Macy's. Under McComb it became a trademark the company could sell to pay down debt, and it did, for $267.5 million. The authenticity the name originally carried could not be transferred. The trademark could.
This isn't an argument against founder-named companies. It's an argument for deciding early what the name is supposed to guarantee, and building the guarantee into processes that can outlast the founder's personal involvement.
Tactic: Write down the specific promises your name makes to customers, and make each one a measurable standard someone other than you can enforce.
Principle 4
Build a system of reinforcing choices
Siggelkow's analysis shows that the Liz Claiborne model wasn't one idea. It was a set of interlocking choices in design, presentation, selling, marketing, and production, each making the others stronger. Collection design only paid off with collection display; collection display only worked if the company sold to the floor rather than to separate buyers; the whole thing only worked if production could deliver complete groups on schedule six times a year.
F
The Claiborne Activity System
How each choice reinforced the others, following Siggelkow's framework.
| Domain | Industry default | Claiborne choice | Role |
|---|---|---|---|
| Design | Single items, four seasons | Coordinated collections, six deliveries a year | Core |
| Presentation | Classification departments | Collection grouping, then in-store shops | Core |
| Selling | Separate buyers per category | Sell the whole collection; in-store specialists | Enabler |
| Production | Domestic plants, often owned | No owned factories; Hong Kong office by 1978 | Enabler |
| Marketing | Status and exclusivity | Mass access: 9 million fragrance samples | Extension |
| Distribution | Selective | Very broad department-store coverage | Later risk |
The result was hard for competitors to copy. A rival could imitate the separates in a season, but imitating the separates plus the floor arrangement plus the delivery schedule plus the offshore production plus the merchandising specialists took years. That is why the company's return on equity was the highest of any Fortune 500 industrial in the 1980s.
Tactic: Map every major operating choice your company makes and test whether each one strengthens your core innovation or works against it.
Principle 5
Fear the fit that still fits internally
The tightly connected system that produced the 1980s also produced the early-1990s stall. Siggelkow's important distinction is that a company can have perfect internal fit, with every choice reinforcing the others, while losing external fit with a changed market. Because the internal pieces still work together, nothing internally signals a problem. Every department is doing its job well. The overall result is wrong.
The customer had changed. Women who once wanted to be told what to wear now wanted to be shown options. Collection and the casual lines had become too similar. One customer's comment, that you didn't need to see the label to know a garment was theirs, would have been praise in 1985 and was a complaint in 1995. The company's coherence had become sameness.
The lesson for operators is that tightly integrated systems need an outside sensor the system can't override. Claiborne had built that sensor personally by going onto the floor in disguise and listening. When she left, the system lost it, and "we listened to the customer" turned into "they weren't listening to the customer."
Tactic: Assign someone with no operating responsibilities to report regularly on how customers are changing, and give that report the power to put core assumptions back on the table.
Principle 6
Own the knowledge, rent the factories
The company owned no factories. When Chazen proposed moving production overseas, Claiborne was horrified: "We can't even manage our plants in New Jersey." Within about a year, nearly everything was being made abroad. Harvard's case identifies what made it work: Claiborne's detailed knowledge of design and manufacturing, which let her instruct contractors on how to mass-produce designer-quality clothing at moderate prices.
Her fear was justified, and it came from the same expertise that made the model work. Asset-light manufacturing doesn't remove the need for production knowledge. It concentrates that knowledge in the specifications, standards, and instructions that travel to the contractor. A company that rents its factories needs to know more about manufacturing than one that owns them, because it can't walk down the hall to fix a problem.
The model became the company's identity, strongly enough that by 2008 a designer like Narciso Rodriguez didn't want to participate in it. A capability that starts as a cost advantage eventually becomes a culture, and it attracts some talent and repels other talent.
Tactic: Before outsourcing a core process, write the specifications in enough detail that someone who has never met you could meet your standard.
Principle 7
Wait until you can afford to be wrong
Founding stories usually celebrate the leap. Claiborne's story includes a deliberate wait. She saw the opportunity years before 1976, couldn't persuade her employer, and still didn't leave, because she and Ortenberg "dared not risk the family savings until the children had finished college." She founded the company at forty-six, with twenty years of training from the backroom, a husband who understood finance, a partner who knew department-store buyers, and a production specialist.
The delay was the strategy, not hesitation. By 1976 the cost of failure had dropped (the children's tuition was paid) and the odds of success had risen (the partners were seasoned, the relationships existed, and the trend in women's employment was clearer). The $50,000 they put in was money they could afford to lose. The $200,000 they borrowed from friends and family was a sign of trust earned over decades. Ortenberg's 1977 comment, that dynamic growth has to be financed properly, comes from the same patient, careful approach.
Tactic: Before starting a venture, write down the specific conditions under which failure would be survivable, and plan the timing around meeting them.
Principle 8
Divide by competence, reconcile at dinner
The four founders divided the company cleanly: Claiborne in design, Ortenberg in finance, Boxer in production, Chazen in sales. Then they did something that sounds quaint but did real work. "We used to each do our job all day long and have dinner together at night to communicate what was going on so we all knew each other's area."
Clear areas of ownership prevent overlap. Nightly dinners prevent the drift that clear ownership tends to produce. A sales executive who knows what production is struggling with sells differently, and a designer who knows what buyers are saying designs differently. The dinner tied the four domains together.
The credit dispute decades later, with Chazen writing that Ortenberg "always had difficulty giving me credit," shows the strain that even a well-designed partnership carries. Clear roles don't settle the question of who deserves recognition, and the founder whose name is on the company tends to absorb it. A partnership should talk openly about how credit will be shared, early, before the press decides it.
Tactic: Give each co-founder clear ownership of one domain, and set a recurring, informal time when all of them report on everything.
Principle 9
Flatten the symbols, centralize the taste
Claiborne listed every employee alphabetically in the company directory to get around male hierarchies. She also said plainly, "I hold final veto power," and added that designers had to throw out good ideas that "just aren't mine." Those two facts are consistent with each other. She removed the status signals of rank while keeping the decision that defined the product.
The combination works because it separates two things companies often mix up: status and authority. Status signals, like names listed by rank, corner offices, and titles, create politics without improving decisions. Authority over the product's core, its taste and standard, gives a brand coherence. She got rid of the first and kept the second, rang a glass bell to run meetings, and looked at every sportswear garment.
The cost is the one she eventually named: thirty-two designers, a lot of time in elevators, and a company where "Let's run it by Liz" had become the bottleneck. Centralized taste scales only until the person holding it runs out of hours.
Tactic: Remove the visible markers of rank in your organization, but name explicitly the one or two decisions that remain with a single owner.
Principle 10
Go undercover in your own channel
She sometimes posed as a saleswoman to find out what ordinary women thought of her clothes. Harvard's case says she built detailed systems for collecting customer feedback, and the company stayed in frequent contact with department stores about how clothes were displayed and sold. In 1987 she turned the undercover practice into a program, "Project Consumer," with in-store specialists.
The disguise mattered because a founder who is recognized gets polite answers. A stranger talking to a saleswoman says what she actually thinks. Claiborne's shyness, her dislike of being looked at, became an advantage: she was more comfortable being the one doing the looking.
The practice depended heavily on her personally. After she left, the company had programs but not her instinct, and analysts reached a blunt conclusion: they weren't listening. Feedback systems need someone with the authority to act on what they hear.
Tactic: Spend time each quarter in your own sales channel without identifying yourself, and record what customers say when they don't know who's listening.
Principle 11
Refuse the status play when your customer doesn't want it
When the company launched its fragrance in 1986, the industry approach was to start at a few prestige counters and sell with sex. Claiborne distributed nine million samples to every store that sold her clothing well and advertised with a model jumping in a white sweat suit. "We're not a status, snobbish kind of company at all," she said. "My customer trusts me. She's confident in the function of my brand."
Her reasoning was that the brand promised function and accessibility, and a status launch would have contradicted that. Extending a brand into a new category with the new category's conventions risks telling the existing customer the brand has changed. She used the brand's existing logic in the new category instead: wide access, a positive tone, and an appeal to "a woman's idealistic version of herself."
The same instinct shaped her pricing for clothes, set so that both the executive and her secretary could afford them. A brand that serves both people at the desk can't give either of them exclusivity, and it shouldn't try.
Tactic: When moving into a new category, launch using your brand's logic rather than the category's conventions, even if that looks wrong to people in the category.
Principle 12
Distribution is the brand; leave before your approval becomes the bottleneck
Looking back, Ortenberg named one major regret: he wished the brand had had "controlled distribution." Liz Claiborne ended up in so many department stores, with so many sub-brands, that by 2009 it was sold at lower prices in one store and higher prices across the mall. McComb's fix was to give one retailer exclusive rights, and then that retailer bought the name. Distribution decisions made in the expansion years determined what the brand would eventually be worth.
E
Three Eras, Three Theories of the Company
How leadership philosophy shifted after the founders left.
| Era | Theory | Strength | Failure mode |
|---|---|---|---|
| Founders (1976–1989) | One woman's taste, one integrated system | Coherence; highest ROE of the 1980s | Bottleneck |
| Chazen and Charron (1989–2006) | Portfolio of brands; follow trends with data | Scale; sales reached about $5 billion | Sprawl |
| McComb (2006–2014) | Shed the department-store brands; focus on brands with their own stores | Found Kate Spade's growth | Lost the namesake |
The founders' exit was well timed. They spent two years preparing successors and left in June 1989 with the company still near its peak. "We got out at an extraordinarily good time," Ortenberg said. But the successor arrangement shows the underlying problem: Robert Abajian, "the new Liz," didn't actually design. He oversaw designers, as she had come to do. The role had become supervisory, which was why she left, and supervising other designers' work could not replicate a single designer's judgment. A founder whose approval holds the company together needs to leave before that approval becomes the main constraint, and also needs to accept that whatever replaces it will be different.
Tactic: Before broadening distribution, decide what the brand's value depends on, and set a distribution ceiling to protect it.
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Part IIIQuotes and Maxims
In their words
— Liz Claiborne, to Women's Wear Daily, 1986When I was designing, I would close my eyes and picture my customer's closet. I would think, 'What does she have in there and what does she need?' That's the beginning.
— Liz Claiborne, to Women's Wear Daily, 1976I envision my clothes for working women, although that's not always the case. Actually, they're for active, young-minded women who want to put themselves together for under $150. I try to eliminate gimmicks so that the clothes are affordable.
— Liz Claiborne, to the Los Angeles Times, 1986My customer trusts me. She's confident in the function of my brand. So I didn't want to sell my fragrance with a sexy mystique or give the impression you'd have this wonderful guy leaping at you if you wear Liz Claiborne. I'd rather appeal to a woman's idealistic version of herself.
— Jerome Chazen, to Knowledge at WhartonIt sounds a little arrogant; it wasn't. It was a lot of begging and pleading that went along with it.
— Art Ortenberg, to Women's Wear Daily, 1984Our main concern is training capable people to replace us. We will measure our success according to how much less we can work in the future and how much we can delegate to new, capable managers.
Maxims
- Design for the closet. Start with what the customer already owns and fill the gaps, not with what will look striking on a runway.
- Be the woman. The most reliable customer research is a founder whose own life matches the customer's.
- Redesign the floor. If the channel's structure rejects your product, change the channel, through small tests and persistent persuasion rather than ultimatums.
- Rent the factory, own the standard. Outsourcing production requires more manufacturing knowledge, not less.
- Wait for survivable risk. Start the venture once the downside is affordable, even if that means starting at forty-six.
- Flatten rank, keep the veto. Remove status symbols, but keep one clear owner of the decisions that define the product.
- Listen without your name tag. Customers tell the truth to a saleswoman and politeness to a founder.
- Beware perfect coherence. A system whose parts fit each other perfectly can stop fitting the market without any internal warning.
- Ration distribution. Selling everywhere eventually means the brand is valued as if it were sold everywhere.
- Leave before you're the bottleneck. When "Let's run it by Liz" becomes how the company works, it's time to prepare your replacements.
