Liz Claiborne to buy Narciso Rodriguez

In a rare marriage between a mainstream apparel company and a luxury designer, Liz Claiborne Inc. is buying the high-end design firm of Narciso Rodriguez, who became famous for creating the wedding dress that Carolyn Bessette wore to wed John F. Kennedy Jr.

The deal announced Monday should help Rodriguez, who has been struggling financially despite a strong following and enormous press. For Claiborne, which is reinventing itself amid challenges in the industry, the deal marks a move into the hot luxury market.

New York-based Liz Claiborne -- with labels that include Dana Buchman, Juicy Couture and Ellen Tracy -- said that it was paying $12 million to acquire a 50% ownership stake in the name and trademarks from the designer and would form a new company to develop the brand worldwide. Rodriguez will be creative director.

The Narciso Rodriguez collections are sold in such upscale stores as Barney’s New York, Bergdorf Goodman, Neiman Marcus, Saks Fifth Avenue and specialty shops.

Liz Claiborne spokesman Dana Stambaugh said the company estimated the label has a potential to be a $100-million business. Claiborne generated revenue of $5 billion in 2006.

In a statement, Rodriguez, who founded his business in 1997, said the deal “will enable me to focus on my work and all of its possibilities.”

The news came after Claiborne announced last week that first-quarter earnings tumbled 65% as the nation’s department stores cut back on its poorer-performing apparel lines. The company also issued a weak profit outlook.