Lands’ End Looking to Rev Up Retail

Third-quarter results suggest business at the brand is stabilizing.

Lands’ End, having stabilized its business after years of declining sales and profits, is cooking up strategies to open more brick-and-mortar stores.

“We are testing and implementing our strategy for stand-alone Lands’ End stores so that we can create the optimal environment for the brick-and- mortar shopping experience,” Jerome Griffith, chief executive officer, said in a conference call Tuesday after the company disclosed improved results for the third quarter.

“We are learning both from the marketplace and from our customers as we create a store strategy that embodies our brand, resonates well with our customers and offers a seamless multichannel experience. We expect our first location to open in the first half of 2018 and we plan to open a handful of locations throughout the year as we test our concepts,” he said.

Lands’ End only has 11 freestanding outlets, selling primarily full-price merchandise as well as some discounted goods. They were previously called Lands’ End Inlets but now just refer to them as Lands’ End.

The company also has 188 branded shops inside Sears stores, but those have been steadily closing as Sears Holding closes units. Next year, Lands’ End plans to close 14 of its shops inside Sears, and is negotiating to keep another 35 shops running for another 12 months. As far as the remainder of shops in Sears, it’s status quo.

The retail strategy could recover lost sales from Sears and help sustain the momentum Lands’ End is experiencing. Last quarter, the company creeped into the black with net income of $200,000. That compared to a net loss of $7.2 million in the year-ago quarter.

On the revenue side, sales gained 4.5 percent to $325.5 million in the last quarter ended Oct. 27, from $311.5 million in the year-ago quarter. Same-store sales were minus 2.1 percent in Sears’ locations, but up 3.3 percent at the inlets. Taken together there was a comp-store sales decrease of 1.3 percent. Revenues were negatively impacted by closing 31 shops inside Sears locations since the third quarter of 2016. Lands’ End also sells its products online and through catalogues.

Griffith said the sales momentum was “carried through the Thanksgiving to Cyber Monday period.” The third-quarter business was paced by “strong” performances in outerwear, bottoms, knit tops, women’s sweaters and home products.

In other growth initiatives, Griffith also said the company is exploring opportunities to utilize third-party digital channels domestically and internationally and that has increased its focus on the home category “where we see a meaningful opportunity to expand the business.” Lands’ End is also working to elevate its profile and recently signed a deal to outfit the crew of the Weather Channel and will launch a program with Delta Airlines in the fourth quarter of this year.

Griffith, who joined Lands’ End nine months ago, said the business has been stabilized and has a new foundation for growth. The company is sticking to its core American values and classic styling while aiming to update quality and fits.

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