The retailer, which has been struggling with its own brand issues as well as the recession, now has 12,500 employees compared with 18,000 at the end of 2006.

Earlier this month, Liz Claiborne posted a much wider-than-expected third-quarter loss, part of a run of losses the retailer has been experiencing. Chief Executive Bill McComb at that time stopped short of saying the company could return to profitability next year, but did indicate that new plans for the Liz namesake line, in which J.C. Penney Co. (JCP) will be the only U.S. department store to carry and expand the brand, should allow that part of the business to show earnings in 2010.

The response to Levi Strauss put it at 83 on the customer satisfaction meter, up 6.4 percent from 78 a year ago. That's just below Levi's all-time high of 84 in 1994 — and the first time the brand has held that much appeal for the 100,000 people polled annually about their buying habits in the 15 years since then. The satisfaction index is pegged to a baseline of 100.

The classic denim brand has been lifted, in part, by its optimistic, youthful, pioneering "Go Forth" marketing message, said spokeswoman Erica Archambault. "It is a reminder that Levi's are jeans of people who work hard, are self-reliant and independent." Also clicking with shoppers, Archambault said, are "innovative" finishes, such as Levi's "rips and repairs, destructed look."

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Like Levi Strauss, Liz Claiborne received its best customer reviews since 1994, advancing 3.8 percent to score an 82 (versus 84 in the first-ever index). Affordable offerings in Liz Claiborne's Kate Spade and Juicy Couture collections, as well as the addition of Isaac Mizrahi to design Liz Claiborne New York, led consumers to "see more value" in the company's apparel, Fornell said.

Macy's, for one, is not sorry to see the Liz Claiborne brand go. "The brand has not been performing for us," said Jeff Gennette, chief merchandising officer at Macy's, which carries the brand in 220 of its 810 doors. "We always look at underperforming locations and we were doing that with Liz in both the petite and the misses' areas. That's really been the trajectory over the years. We have been paring it down and the brand continues to underperform its competitors." Gennette noted some changes in the Mizrahi-designed offerings this year, but said the brand continued to be a laggard. "There's no brand out there that, if the product is not right, is going to do well," he said. "It depends on the design talent at those wholesale partners."

To compete, he said wholesalers also have to work to get fashions to the stores as quickly as possible. "You have to have your pipeline shortened and you have to be able to react in season," Gennette said. "The ones that are figuring that out are the winners."

"I do, and obviously we would be the ones to do it," responded McComb.

The strength of Gunn - who skyrocketed to fame through television’s popular "Project Runway" reality series - is his impeccable eye, McComb said.

"Tim is not a designer. He does not design. What he would bring to the table is the common sense edit of how to build a wardrobe," said McComb.

"He could do the black dress, the white top, the work pants ... it would be not necessarily high faloutin' fashion, but really smart."

Five years after Lord & Taylor dropped the Liz Claiborne brand, the better-priced collection is back in favor with the retailer. L&T chief executive officer Brendan Hoffman confirmed now that the brand has relaunched with Isaac Mizrahi as its designer this spring, L&T — which dropped the brand in 2004 as the retailer tried to reposition itself more upscale – is "launching it in a big way in fall and hopes to have some limited doors this spring. For us it's a brand that's always resonated with our customer, and now that it's been relaunched with Isaac, I've heard great things, and think it will be a great addition," said Hoffman.

While the main point of the evening was introducing customers to a more modern Liz Claiborne brand, the subtext was mending the relationship between the brand (the flagship of the $4 billion Liz Claiborne Inc.) and Macy's Inc. The relationship had been tested over the last few years, first by poor performance of the better-priced label and two years ago by the introduction of the exclusive derivitative Liz & Co. brand at J.C. Penney Co. Inc. Macy's president and chief executive officer Terry Lundgren had applauded Claiborne's hiring of Mizrahi in January 2008, but had adopted a wait-and-see approach about how the brand turned out.

While Lundgren wasn't at Thursday's event, Macy's chief merchandising officer Jeffrey Gennette was and sang the brand’s praises.

Sales in the quarter fell 22 percent to $911.2 million from $1.17 billion, hurt by steep losses in the partnered brands division as well as in Mexx, which the company broke into a third category — "international-based direct brands" — for the first time to separate the troubled Amsterdam-based retailer from the better performing direct brands Juicy Couture, Lucky Brand and Kate Spade.

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For fiscal year 2008, Claiborne saw a loss of $951.8 million, or $10.17 a diluted share, compared with a 2007 loss of $372.8 million, or $3.74. Annual revenues fell 10 percent to $3.98 billion from $4.44 billion. 2046438 Due to economic uncertainty, Claiborne is "dramatically reducing this reinvestment in 2009 as we plan to open approximately 12 stores versus the 139 stores in 2008," according to chief financial officer Andrew Warren. The company said it has cut 2,700 positions and realized $450 million in cost savings through restructuring and, for 2009, is further reducing capital expenditures to $60 million to $70 million to increase liquidity and pay down debt.

"I wouldn't say that there is a lot of fat left," said McComb. "But I would say that definitely there are additional cost places that we can and will go, and I am not even so sure that we're going to wait to trigger based on a softening environment." Juicy sales were $172 million, a 2 percent rise or, excluding fragrance licensing, 17 percent growth. Lucky sales were $138 million, a 21 percent increase, or 17 percent excluding fragrance. Kate Spade sales climbed 28 percent to $40 million.

Brights spots within the direct brands portfolio have included the new Juicy intimates line, the new Kate Spade jewelry line, Lucky accessories and the new Juicy flagship on Fifth Avenue in New York, according to the company.

The move comes as Liz Claiborne has continued to struggle amid the woes in the retail industry. The company said Tuesday it will cut 725 positions and suspend merit pay increases for all employees. The job eliminations span all levels of the company and are scheduled to be completed by the end of the first quarter.

The company the past two years has closed six distribution centers, eliminated 2,200 jobs and streamlined its brand portfolio by selling, closing or licensing 14 brands.

Liz Claiborne has struggled to find its identity in recent years. The company has focused on developing its "direct" brands - Kate Spade, Lucky Brand, Juicy Couture and Mexx - by beefing up their marketing and adding branded specialty stores.

Liz Claiborne Inc. chief executive officer William L. McComb said the restructuring at the company is about 80 percent complete. The remaining 20 percent of the task will likely result in more cuts in 2009, sources indicated.

The $4 billion vendor has trimmed 1,500 jobs and $265 million in costs in the last two years. But McComb said reduced consumer spending in the recession and investor fears that the credit drought might prevent the company from getting a $650 million asset-based revolver loan have helped push down Claiborne's stock price to as low as $1.46, compared with a 52-week high of $22.78.

Shares dropped 70 cents, or 23 percent, closing at $2.28 Tuesday. Uncertainty continues to persist throughout the market, but Isaac Mizrahi's spring relaunch of the core Liz Claiborne brand has been given high marks by retailers who previewed the line. The brand accounts for almost a quarter of the parent company's volume. Mizrahi's debut is coupled with relaunches of Kate Spade, Dana Buchman for Kohl's and Claiborne by John Bartlett, but the company is predicting that consumer malaise will offset sales gains from revived product.

William L. McComb, chief executive officer of the $4.99 billion Liz Claiborne Inc., told WWD that the "long-term" deal — the brainchild of Dave McTague, executive vice president of partnered brands for Liz Claiborne Inc. — has been in the works for months.

"Dave walked in the door with a charter to fill the emotional vacuum of the brand," McComb said. "Liz Claiborne is an extremely well-known, well-regarded brand that failed to deliver on the core values that made it great in the first place: color, fit, value and style. The turning point was when Liz Claiborne died [in June], and we got lots of calls and letters from consumers who didn't know she hadn't been working here since 1989."

Claiborne is hopeful that Mizrahi can bring his fashion wit and color sense to the struggling women's collection. Mizrahi's appointment follows Monday's announcement that John Bartlett will design the Claiborne men's sportswear line, under the label Claiborne by John Bartlett, also launching for spring 2009. Unlike the men's line, the core Liz Claiborne collection will not be called Liz Claiborne by Isaac Mizrahi, though his association with the brand will be clear on the labels.

"Isaac is an international icon," McTague said. "He not only knows this woman, he adores her. His core values are so perfectly aligned with our core brand: fit, color, comfort, value, fun and a uniquely American brand."

Claiborne founded Liz Claiborne Inc. in 1976 along with her husband Art Ortenberg and Leonard Boxer. Their goal was to create a collection of outfits aimed at the growing number of women entering the work force.

The new approach to dressing revolutionized the department store industry, which had only focused on stocking pants in one department and skirts in another. Liz Claiborne executives were instrumental in working with department stores to present all the related pieces of a wardrobe in one department.

The clothes became an instant hit, and the company went public in 1981. By 1985, Liz Claiborne Inc. was the first company founded by a woman to be listed in the Fortune 500, according to the company's Web site. The company, whose brands now include Ellen Tracy, Dana Buchman and Juicy Couture, generated sales of almost $5 billion last year. Liz Claiborne retired from the day-to-day operations in 1989.

"In losing Liz Claiborne, we have not only lost the founder of our company, but an inspirational woman who revolutionized the fashion industry 30 years ago," said Bill McComb, CEO of Liz Claiborne, in a statement. "Her commitment to style and design is ever present in our thinking and the way we work. We will remember Liz for her vision, her entrepreneurial spirit and her enduring compassion and generosity."