Liz Claiborne: A New Name Does Not Equal a Strategy
Today Liz Claiborne made a non-announcement. The company is going to change its name -- to what, it doesn't know.
If I've learned anything in business it is that name changes are a sure and certain sign of strategic funk. But not to know the new name just amplifies the funk. It's like putting a bad accessory on a bad outfit.
What's in a Name?
What's wrong with name changes? I've sat around so many board tables where the business was drifting. Usually the first sign that the company won't be able to fix itself is when someone suggests a logo redesign. That offers terrific displacement activity for months. First a brand management company is hired. To build up their billable hours, they interview all the senior players about brand identity, assemble a big glossy report, then some new logos that fail either because they're just like the old one -- or because they're not just like the old one. What all this means is: No one knows what the company stands for any more and, much more important, nobody is prepared to make a decision.
When that stalls, someone inevitably suggests the name change. But this is hard too because it's tough to name a company when you don't know what it stands for. Everyone hopes that the new name will work miracles: reposition the business, give it an identity it lacks and add sizzle, sex appeal and sales. Veteran observers will mutter quietly that some of the world's most successful companies have meaningless names: IBM, Microsoft, WellPoint, United Technologies, Safeway, Sysco. But they'll be ignored while everyone searches for the magic name that restores fortunes.
No Substitute for Strategy
The true reason why Liz Claiborne is lost and confused is because the middle market, in a recession, is Death Valley. I call it the Tiffany/Walmart effect: Luxury brands retain loyalty and allure while everyone else skids way down market. Moreover, Claiborne hasn't done three fundamental things very well:
Office attire changes
The Claiborne brands have done little to reflect how standards and fashions in office wear have changed. The quasi-male office suit for women is long gone, replaced by clothes that are elegant, well-cut but comfortable. What's particularly important about them is that they can easily be personalized and made more individual with the addition of quirky (often expensive) accessories. In other words, the clothes are the setting for the real center of attention: the wearer. Claiborne brands struggle with this concept. They still think they're about brand -- even though no one knows what that brand is any more. The mishmash of names (Mizrahi, Mexx, Kate Spade) and retail outlets (QVC, Penney's and Macy's) isn't smart diversification. It's yet more evidence of strategic confusion.
Lifestyle changes
Women who dress well for work do not want to have to change after work -- whether for the school pick-up, the cocktail lounge, dinner, or the movies. That means the clothes have to look as good and interesting out of the office as in it. Most of the Claiborne brands are designed for one or the other, turning a blind eye to the fact that their customers have just one life and don't want to waste it changing clothes.
Focus is everything
The grab bag of brands assembled under the Claiborne roof has helped to distract from the core problem with this business: It just isn't very profitable. Former executives from the company aren't surprised. It's both too corporate -- and too willing to succumb to the garment industry tradition of big egos, late nights, and generalized hysteria. In other words, it just isn't very well managed -- and it hasn't been for years. A company that doesn't know what it stands for can't decide what's important and what's wasteful. Nor does it know who to keep and who to lose. So the smart ones jump first.
Which leaves you wondering: just how much of this can a name change fix?
Further Reading
Why Changing Your Name is a Waste of Time
Don't Waste Money on PR