NEW YORK (Reuters) - Juicy Couture, known for its velour track suits made popular by celebrities like Jennifer Lopez and Madonna and a favorite of teenage girls, may soon be looking for a different kind of shopper.
Fashion company Fifth & Pacific Cos FNP.N is in the early stages of exploring alternatives for its struggling Juicy brand, including a potential sale, according to two people familiar with the matter.
The company, formerly known as Liz Claiborne Inc, has been reaching out to potential buyers, including some in Asia, to gauge their interest in buying Juicy, said the people, who requested anonymity because the matter is not public.
The discussions were preliminary and Fifth & Pacific has not made a decision on whether to sell the brand, the people said.
Fifth & Pacific, which also owns the kate spade and Lucky Brand jeans labels, said it does not comment on rumor and speculation.
A potential sale of Juicy comes as Fifth & Pacific looks to focus on its fast-growing kate spade label, the popular maker of pricey leather handbags that has become the company’s crown jewel.
Juicy has stumbled in recent quarters and the company has said it expects “slightly negative to flat” sales growth for the brand in 2013.
Fifth & Pacific has brought in new management to turn it around, including hiring former Kenneth Cole executive Paul Blum as chief executive for the brand last December.
During the fourth quarter, same-store sales at kate spade and Lucky Brand rose 27 percent and 3 percent, respectively. Same-store sales fell 2 percent at Juicy during the same period.
“Most investors own Fifth & Pacific because of kate spade,” said Jim Chartier, an analyst with Monness, Crespi, Hardt & Co. “Juicy has really been the issue about what’s really holding back the valuation of the company.”
In 2012, Juicy accounted for net sales of $499 million and adjusted earnings before interest, tax, depreciation and amortization of $23 million to $24 million, according to the company’s preliminary estimates.
The kate spade line earned adjusted EBITDA of $94 million to $95 million on net sales of $462 million last year.
Fifth & Pacific management has acknowledged publicly that change is needed for Juicy.
Juicy “is in full turnaround mode,” CEO Bill McComb said earlier this month at the ICR XChange Conference in Miami. “This has to be the year where Juicy finds stabilization.”
Bankers said Juicy could try to reinvigorate its brand in the Asian market, where it still has a strong presence. This strategy worked for Tommy Hilfiger, which achieved popularity overseas through its acquisition by PVH Corp (PVH.N) after losing favor with U.S. consumers.
Reporting by Olivia Oran and Soyoung Kim in New York; Editing by Dan Grebler