Claiborne, 78, died on Tuesday at the New York Presbyterian Hospital after battling cancer for a number of years, said Gwen Satterfield, her personal assistant.
Claiborne founded Liz Claiborne Inc in 1976 along with her husband Art Ortenberg and Leonard Boxer. Their goal was to create a collection of outfits aimed at the growing number of women entering the workforce.
The new approach to dressing revolutionised the department store industry, which had focused only on stocking trousers in one department and skirts in another.
By 1985, Liz Claiborne was the first company founded by a woman to be listed in the Fortune 500, according to the company’s website.
The company, whose brands now include Ellen Tracy, Dana Buchman and Juicy Couture, generated sales of almost £2.5 billion (€3.7 billion) last year.
“In losing Liz Claiborne, we have not only lost the founder of our company, but an inspirational woman who revolutionised the fashion industry 30 years ago,” said Bill McComb, chief executive of Liz Claiborne, in a statement.
“Her commitment to style and design is ever present in our thinking and the way we work. We will remember Liz for her vision, her entrepreneurial spirit and her enduring compassion and generosity.”
Claiborne owned a ranch near Helena, Montana, and supported numerous charitable, civic and educational groups.
Her favoured cause was a crusade against domestic violence.
Claiborne and her husband retired in 1989. Boxer retired in 1985.