352363--2/23/2010--CLAIBORNE_LIZ

related topics

{product, market, service}

{operation, international, foreign}

{acquisition, growth, future}

{condition, economic, financial}

{personnel, key, retain}

{property, intellectual, protect}

{competitive, industry, competition}

General economic conditions in the United States, Europe and other parts of the world, including a continued weakening of such economies, restricted credit markets and lower levels of consumer spending, can affect consumer confidence and consumer purchases of discretionary items, including fashion apparel and related products, such as ours. The wholesale businesses in our Direct Brands and Partnered Brands segments are dependent to a significant degree on sales to a limited number of large US department store customers, and our business could suffer as a result of consolidations, restructurings, bankruptcies and other ownership changes in the retail industry, financial difficulties at our large department store customers and negative reaction to our licensing arrangements with JCPenney and QVC. We may not be able to effect a turnaround of our MEXX Europe business. We cannot assure the successful implementation and results of our long-term strategic plans. The successful implementation and execution of the licensing arrangements with JCPenney and QVC presents risks, including, without limitation, our ability to efficiently change our operational model and infrastructure as a result of such licensing arrangements, our ability to continue a good working relationship with those licensees and possible changes in our other brand relationships or relationships with other retailers as a result. The success of our business depends on our ability to anticipate and respond to constantly changing consumer demands and tastes and fashion trends, across multiple product lines, shopping channels and geographies. We cannot assure that we can attract and retain talented highly qualified executives, or maintain satisfactory relationships with our employees, both union and non-union. Our business could suffer if we cannot adequately establish, defend and protect our trademarks and other proprietary rights. Our success will depend on our ability to successfully develop or acquire new product lines or enter new markets or product categories. The markets in which we operate are highly competitive, both within the United States and abroad. Our reliance on independent foreign manufacturers could cause delay and loss and damage our reputation and customer relationships. Also, there are risks associated with our agreement with Li Fung, which results in a single foreign sourcing agent for a significant portion of our products. Our international operations are subject to a variety of legal, regulatory, political and economic risks, including risks relating to the importation and exportation of product. Our business and balance sheets are exposed to domestic and foreign currency fluctuations, including with respect to the outstanding euro-denominated notes.

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352363--2/23/2010--CLAIBORNE_LIZ_INC