LIZ: A Juicy Turnaround?

Investors have been as fickle about Liz Claiborne in the past year, as fashionistas have been about the latest hemline. But fashion is in the eye of the beholder and “Fast Money” noticed something unique in the company's new CEO, William McComb.

McComb first joined us on a day in May, when the company's profit had dropped 65% and shares were bid down the most in almost 9 years. But he told it like it was. "The consumer was weak in Q1, our product needs to perform better....(and) we’re experiencing changes in buying patterns at department stores."

He added, "Let me come back in July and I'll lay out the growth plan for you." And come back in July he did along with Liz Claiborne's share price. "We had a big portfolio with many brands, and the strategy we laid out involves paring the portfolio down to 4 major brands (Juicy Couture, Lucky, Kate Spade, and Mexx).”

Since that time Liz Claiborne has shed some of their other brands. But at the same time, investors have shed shares of LIZ. The stock is down since McComb unveiled his plan in July. Lucky for us, he's back with an update on last quarter's progress. Can he, in fact, remake this classic brand?

Following are excerpts from the conversation between McComb and the Fast Money panel.

What happens next?

“The company is on track with the turnaround plan that we presented on July 11^th,” says McComb

He adds, “We’ve eliminated $150 million of cost by December 31^st. And we are accelerating the initiative to narrow our portfolio. We shed 4 brands and shut down 4. Now we have another 9 brands that we’re putting through strategic review and are anticipating by the end of the first quarter we will finish that part.”

How has the weather affected your business?

“The warm October and an un-seasonably warm September have slowed the turnaround more than anything…. Mall traffic is down in some estimates by double digits (because of the weather)," says McComb.

How about the slowdown in M&A?

McComb says, “We don’t anticipate that the M&A market changing will have an impact on the 9 brands that we’re planning to sell. We have moved through the process. We took bids in early October and have now moved forward.. with a select group of bidders and that process is moving forward.”

So you have not seen potential bidders falling off?

“No we have not,” says McComb.

How much longer will the turnaround take?

The plan we presented on July 11^th included solid earnings growth next year coming from cost reductions and efficiencies,” says McComb. ”In 2009 we said solid earnings growth will be driven by cost reductions and solid earnings growth.”

Dylan asks the traders what they think of LIZ?

All the traders like how willing LIZ is to communicate bad news. They all think the stock is a buy at these levels as a turnaround story.

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Trader disclosure: On Oct 30, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (YHOO), (ATVI), (INTC); Najarian Owns (C); Najarian Owns (BHI) Options, (BIDU) Options, (HAL) Options, (UA) Options, (YHOO) Options, (SNDK) Options, (GOOG) Options; Finerman's Firm Owns (TSO), (WMT), (MSFT), (YHOO); Finerman's Firm And Finerman Own (C), (GS), (HD), (TGT); Finerman's Firm Is Short (MER) And Owns (MER) Puts; Finerman's Firm Owns Russell 2000 Puts; Finerman's Firm Owns S&P 500 Puts