Liz Claiborne: The Legend, The Woman, The Company

03/18/2010 05:12 am ET | Updated May 25, 2011

On a late afternoon in 1987, Liz stood before the shareholders of her company, Liz Claiborne, Inc. She was 57 years old. The company, founded 10 years before, had achieved success by dressing working women in snappy sportswear at the right price, and now stood at the pinnacle of American fashion. When the company went public in 1981, the stock offering was the most successful of the decade, second only to Microsoft.

So the shareholders had reason to stand and applaud Liz. She was a woman who had readied herself to be a designer of infallible taste and skill. She was that rarity among designers, a person who had an unshakeable vision of the product that would bear her name. And while it was true that the company had dazzling profits--we had the highest return on investment of any Fortune 500 company over a ten- year period--Liz never lost sight that the numbers were only a reflection of the integrity of the product.

"I want all of us to remember that this company was started with pennies and a vision," she told the shareholders that day. "And respect for our craft. And respect for our suppliers. And a high regard for the intelligence of our ultimate consumer."

We were lucky; women were entering the work force in huge numbers and we found them and they found us. Today, almost forty years later, the world of apparel is faced with uncertainties -- things falling apart, severe economic times that have tested every label's staying power. Artifice has replaced art. As I think about "then" and the industry now, I'm sure that we owed our success to having started with a magical sense of purpose. And we stayed with it. We got it "right" and not many do.

A little personal history first. Liz and I had been married 20 years when we decided, in 1975, to start an apparel company together. We had met in 1954. I was running a dress division for a large Milwaukee company and badly needed a designer who had a flair for sportswear. I ran an ad; designers submitted sketches. One group of sketches struck me as just right so I arranged an interview.

Enter Liz Schultz, a strikingly beautiful woman of 27 who had worked for a sportswear house. I hired her at once. We were both unhappily married, both emotionally vulnerable. This relationship between two love-smitten people produced thoroughly unsalable merchandise. Management fired me but asked Liz to stay on. Without a second thought she said "if he goes, I go." And we both went.

We were married on July 5, 1957.

Liz's career took her through a thorough apprenticeship. By 1976 she had become the highly regarded designer of junior sportswear at Youthguild, a division of Jonathan Logan. She had also established herself as Liz Claiborne, her maiden name.

I had run a textile company and was considered a person with a good eye and taste. That turned out to be important. Liz trusted my eye. It was a rarity, a husband and wife team, who "saw," "observed," "evaluated." Our skills were highly complementary.

We set out to raise $200,000. Liz and I put in $50,000; we counted on the rest coming from friends and family. Len Boxer, a superb engineer (Liz insisted that a third partner must be an engineer) added $25,000; the rest came from industry friends and family. We were clear about our concept. We would design and manufacture youthful sportswear - better sportswear. Better than what? Moderate was on the way out. What would replace it? Our answer was coordinated sportswear, well made and at affordable prices. Certainly in Liz's mind, quality construction was as basic to product excellence as was design. They were two faces of the same coin. Len taught his patternmakers and sewing lines "the Claiborne way."

"We did everything," Liz told a reporter. "We emptied the trash cans and I went out to track button and braid distributors myself. We worked seven days a week and had no income for the first nine months. You can't expect to have your own business and maintain your lifestyle."

The beginning of the beginning was early one morning in February of 1976, with a phone call from Ellen Daniel, a better junior sportswear buyer at Saks Fifth Avenue. Ellen had two suppliers, Ellen Tracy and Jones New York, and she badly needed more if she was to remain a buyer.

In those days, sportswear was actually orchestrated by the buyer. Ellen would put together pieces from her vendors that seemed to be wearable as an ensemble, and to select colors that would "blend" with colors in the "hard" pieces on the racks. All in all, it became a mélange of clothes in search of an inventive consumer. Our clothes were conceived as related sportswear, with a number of well-priced items--sweaters, crepe-de-chine blouses, even velour tops-- offered to round out the presentation.

The value was there, the fit was there, and the concept--that old worrisome concept--was right on target.

It wasn't quite 7 a.m. when our phone rang and Ellen spoke with Liz. "I don't know what you're going to be making in this new business I hear you're starting, but whatever it is I want Saks to be the store to break it," she said. "I'll be down to see sketches as soon as you're ready, and I'm reserving space for our first ad. You've got almost a full page in Sunday's Times, July 25th."

The ad featured a close fitting double-breasted blazer, stitch-front kick-pleated skirt, over a sleek black shirt. The flannel pieces were shown in an off-white kasha color. The competition featured traditional grey flannel. Our color was gutsy - and if the suit had failed we would have been out of business. But the ad was a smash. The collection flew at retail. Other stores soon followed with orders.

We took more office space. We created a showroom and enlarged the design area.. In April 1977, fourteen months after the start-up, we brought in Jerry Chazen to head sales. He was then with EccoBay, a maker of acrylic sportswear. Jerry had been my college roommate. He was ambitious, charming: the epitome of a salesman. But the key was that the clothes outsold the competition and that the machine behind that clothing was a well-managed team of professionals.

We gave him a full partnership, gratis. He contributed his know-how and self confidence, and we needed someone who had sales background. Perhaps this trust was based too heavily on our past friendship and on what seemed at the time a worshipful embrace of Liz's talent.

We were instantly successful. We started a sizable number of new divisions--some roaring successes, some embarrassing failures. By the time Liz and I left the company, in 1989, annual sales were more than $1.4 billion.

On the day of the shareholders meeting two years earlier, Liz felt that she must reassert the underlying values of her company. She knew there was a growing disunity of values that might in time fracture her company. She knew that the chasm between sales and design would widen as the company grew. And I knew that if I brought matters to a head the company would suffer.

So we determined to leave the company at a time it was cash rich, when it still retained the loyalty of its suppliers, and before the core values we believed in were lost. I'll never forget the day Liz and I resigned from the executive committee. Chazen, now empowered as chief executive, appeared in my office to inform us that the committee had installed clothing allowances for its members, assigned parking spaces at the warehouses and created a separate executive dining room.
I said, "No matter how you feel, Jerry, that's an enormous mistake, a real kick in the backside to the way this company has been run."

"We're a different company now," he said.

It was certainly a different company. The compulsions of being publicly held and stretching for volume growth made change inevitable.

It is now more than 30 years later. Liz is gone. Leonard is gone. And to some very large extent, so is the company. Department stores are still in a quandary. Many consumers are grateful to shop online. Customer service is shoddier now than it was in our early days. Liz loved to spend time with customers in dressing rooms in stores. She knew that clothes moved, as did the wearer. She listened and responded.

In Len's day, the "Liz" sewing lines in Kaohsiung, Taiwan, were peopled by women who wore "Liz Red" caps and were proud to do so. That is how Liz and I always pictured our company

The applause that Liz received from shareholders in 1987 was an honest tribute to past events and the numbers they produced. But times change and tides recede. Staying the course demanded an unswerving belief in the values that took the company to the top. That agreement in principle did not exist. Soon, indeed, it became a very different company.