The following paper will compare the five-year performance of two apparel manufacturers utilizing the DuPont Framework and Return on Equity. Then a three- year analysis of common-size income statements will be undertaken to explain changes in income and expenses within each company. Jones Apparel Group (JNY) and Liz Claiborne (LIZ) are the industry leaders in the manufacturing of better clothing, footwear, fragrances, and costume jewelry, and the subject of this analysis.Jones Apparel Groups recognized brands include: Jones New York, Polo Jeans Company, Nine West, Napier, and costume jewelry licensed under the Tommy Hilfiger brand. Jones aims to gain stability in the apparel industry as well as retail markets through building complete lifestyle brands serving a wide breadth of consumers in a wide range of income levels and shopping destination preferences. (PR Newswire, 2/7/01).Liz Claibornes brands include: Claiborne, Curve, Lucky Brand, Monet, and licenses to produce DKNY Jeans and DKNY Active. The companys success can be attributed to its multi-brand, multi-channel strategy of diversification in the apparel marketplace. (PR Newswire, 2/23/01).The apparel industry is among the most volatile sectors in the market today. Subject to overnight changes in trends and fashion, the industry leaders must be accurate with their predictions and quick to accommodate changes. Because of these fluctuations, it is very hard to assign a competitive advantage to one company over another. While Jones Apparel Group seems to have a comparative advantage in profitability and leverage, Liz Claiborne has been historically more effective at generating revenue from its assets. While Liz is surging to eclipse Jones ROE numbers as of late, Jones Apparel Group holds a historical comparative advantage in return on equity and overall financial health.One look at the common-size income statements for these companies can tell a story. While Jones Appar...
