Liz Claiborne to sell Mexx business

Liz Claiborne Inc., the owner of Juicy Couture and Kate Spade, said it agreed to sell its Mexx business to cut losses from the unit and meet targets.

Liz Claiborne will sell Mexx to a joint venture with The Gores Group LLC in exchange for 18.75 percent of the common equity of the venture and $85 million in cash, the New York- based company said in a statement today.

The transaction will eliminate the forecast loss in 2011 adjusted earnings before interest taxes, depreciation and amortization of about $25 million for Mexx globally. It will also help Liz Claiborne reach its goal of reducing debt at the end of 2011 to less than the $578 million reported at the end of last year, it said.

“We've brought the Mexx European business to the early stages of a true turnaround,” William L. McComb, chief executive officer of Liz Claiborne, said in the statement. “But there is more to be done, and in uncertain times and true market volatility, de-risking became essential.”

Thomas Grote will remain CEO of Mexx's global business, which last year reported revenue of more than $730 million.