Lands' End to stop 'relying on Sears'
· Lands' End will unveil a new brick-and-mortar concept in the Chicago area in early 2018, and is planning to open another four to six stores this year to test and refine the concept, according to a presentation from the apparel brand at at the ICR Conference. "We have a customer base that likes to shop in stores," Lands' End CEO Jerome Griffith said, according to a webcast of the event posted on the company's website.
· The company will also open between 40 and 60 stores over the next five years, and move away from the locations it runs in Sears stores, (a leftover from when Sears owned the Wisconsin-based apparel company). "We will not be really relying on Sears in the future for growth for us, we'll be relying on ourselves," Griffith said.
· The company will also grow its B2B business, which Griffith called its "secret weapon" and the source of two-thirds of its sales. Lands' End announced deals to provide Delta Airlines and American Airlines with new uniforms. The company has plenty of capacity to grow its business and school uniform sales and will do so through deals and acquisitions, he said.
Sears' ownership marked the end of a period of innovation at Lands' End, Griffith said, adding that's now over. The brand has 180 stores in Sears locations and just 11 Lands' End stores — but that ratio is destined to change, and the company expects its Sears partnership to "go away," according to Griffith.
But Lands' End began as a catalog business, which has naturally shifted online, and 90% of its sales come from someone clicking on one of its websites, Griffith noted. That has also garnered the company with loads of data that it will now begin to actually leverage, he said.
The company's turnaround is predicated on four pillars: a focus on product, being a digitally driven company, improved distribution and improvements to a neglected infrastructure.
In recent years, the company was "erratic," Griffith said, resulting in a loss in its customer base that is being reversed starting this year. Lands' End has continued to suffer from its association with Sears, which has been slouching toward death for years now and which spun off the apparel retailer in 2013.
The retailer does retain loyalty among many of its core customers, but that was muddied during the tenure of former CEO Federica Marchionni, who arrived in 2015 from Dolce & Gabbana's USA unit and stepped down in September. Marchionni ran things from New York and re-introduced the Canvas brand that failed to resonate with either core customers or its intended millennial customers. Last year, the retailer wrote down $6.7 million of prior-season Canvas inventory, which had a 50 basis point negative impact.