AUDIENCE SHAREHOLDER ISSUES 1) INEFFICIENCY OF TOP MANAGEMENT After the replacement of Chazen by Bill McComb, the net sales

after the year 2006 decreases gradually. This is because the poor management by Bill McComb, who has not much experience in the clothing line. His previous experience is based more on managing branded products such as Johnson & Johnson, Tylenol, Motrin and Clean & Clear. This means he led the company without any apparel industry experiences and he had never served as chief executive officer before. Plus, the Great Recession of the company hauled McComb into further destruction in the company`s leadership which results in sales downturn in the next five consecutive years. Since becoming of chief executive officer, he does not have a clear vision to drive the company towards the right pathway in achieving company`s goal. Thereby, the company did not perform any improvements over the years which resulted in increasing of the company`s debt due to the unsold inventories of past seasonal clothes. Ron Johnson, Apple's senior vice president will head up JC Penny and taking the helm from Myron Ullman who will become executive chairman of the board. The situation when the rare poaching of a top executive from Apple was kick-started by activist investors William Ackman of Pershing Square Capital Management and Steven Roth of Vornado Realty Trust. It is show that the inefficiency of top management who handled the organization of the company. Besides that, on Jan. 27, 2011, the election of Lawrence Benjamin to the Companys Board of Directors is also one of the issues for the inefficiency of top management.

RECOMMENDATION Liz Claiborne has undertaken a number of restructuring initiatives in order to streamline its organizational structure. The company eliminated more than 1300 positions, including approximately 25% of management positions. In addition, Liz Claiborne Inc. has entered into an agreement with Li & amp, Fung Limited in the United States for the companys owned retail stores. The consequences from implementation of this initiative, the company will have significantly reduced its fixed cost base for distribution.

3) ECONOMIC DOWNTURN Due to economic downturn in year 2009, consumer prefer to purchase a cheaper product. They cut back on discretionary spending. During this period, consumers prefer to purchase a product which is affordable within their budget range rather than spending a large amount for a branded product. Like many other retailers, Liz suffered sluggish economy. This means that Liz was unable to produce a product that suits the demanded price by consumers at that time. As a result, the net sales of Liz fell 24 percent to $3 billion due to mall traffic and lower spending levels per purchase.