This excerpt taken from the LIZ 10-K filed Mar 1, 2006.
Within the past five fiscal years, the Companys revenues have grown to a record $4.848 billion in 2005 from $3.448 billion in 2001. This growth has been largely a result of our acquisitions of MEXX Europe and MEXX Canada, MONET, ELLEN TRACY, and JUICY COUTURE, as well as organic growth, as we execute our multi-brand, multi-channel, multi-geography diversification strategy under which we strive to offer consumers apparel and non-apparel products across a range of styles, price points and channels of distribution. In implementing this strategy, we seek to position each of our acquisitions and internally developed businesses for transformation into a lifestyle brand, extending their offerings into a broad range of apparel and non-apparel categories. Our revenue growth over the five-year period also reflects the growth of our moderate and mid-tier businesses, which sells products at prices lower than our better-priced offerings, and our non-apparel businesses, as well as continued growth in our retail businesses. We have diversified our business by channels of distribution, price point and target consumer, as well as by geography. During the five-year period, our operating margin rate has improved from 9.6% in 2001 to 10.8% in 2005. This rate improvement primarily reflects the acquisitions and related growth of MEXX Canada, MONET, ELLEN TRACY, SIGRID OLSEN, LUCKY BRAND DUNGAREES and JUICY COUTURE in both our wholesale and retail businesses. All of the above-mentioned businesses operate at rates higher than the Companys better-priced businesses. Gross margins have also improved due to our efforts to better manage our inventories and a reduction in our manufacturing costs. As a result, operating income has grown 58% to $525.3 million in 2005 from $331.7 million in 2001, and diluted EPS increased 61% to $2.94 in 2005 from $1.83 in 2001.