Lampert Wants More Lands’ End

Discussion
Oct 21, 2005
George Anderson

By George Anderson


For many, it has been a foregone conclusion that it is simply a matter of time before Edward Lampert sells off Lands’ End because its upscale image simply doesn’t fit with Sears.


According to one source identified by The New York Post as being familiar with Mr. Lampert’s thinking on the subject, nothing could be further from the truth. “Eddie wants the Lands’ End brand put into Sears stores in a significant way. And he wants to remove any obstacles to making this happen.”


The same source said this hadn’t happened sooner because of obstacles put in the way by former Lands’ End CEO Mindy Meads who was concerned that the association with Sears would hurt her brand’s image.


To implement Mr. Lampert’s vision, Sears has begun testing Lands’ End store-within-a-store concepts at locations in Oak Brook, Ill., Paramus, N.J., Yonkers and Hicksville, N.Y.


While no decision has been made on whether to expand the test, Sears and Lands’ End are said to be pleased with the consumer response.


One of the internal issues with Sears selling Lands’ End in the past has been the department store’s need to markdown merchandise. Lands’ End, under Ms. Meads, was concerned that ongoing markdowns would devalue the brand. Sears found that, without markdowns, product was piling up in the store and backrooms as it went unsold.


The question for Mr. Lampert and Sears, as The New York Post piece points out, is whether Sears shoppers will pay up to twice what they would for other apparel in the store to purchase the Lands’ End branded products.


For many, it’s not a question of if they will buy but that they have to if Sears wants to ever get its business turned around. They point to the statistic that shows less than 20 percent of shoppers who buy hard goods at Sears also shop in its stores for clothing.


“The man who goes to Sears to buy a set of Craftsman tools,” said an unnamed source, “should also be buying a Lands’ End sports shirt there.”


Moderator’s Comment: Is Sears on the right track with its test of the Lands’ End branded store-within-a-store concept? Are the same consumers who buy
Craftsman, Kenmore, etc. from Sears also buying Lands’ End clothing?

George Anderson – Moderator

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14 Comments on "Lampert Wants More Lands’ End"


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James Tenser
Guest
15 years 4 months ago
If Sears/Kmart has a prosperous future ahead of it, it will lie in its performance as a house of brands. Craftsman, DieHard, and other hardlines have bankable reputations. So does Lands’ End. Creating brand destinations within the store for Lands’ End is a sound concept. On previous visits to a local Sears, I have noted that the Lands’ End product was very hard to find because it was mixed in with other items by category. It’s not clear whether Sears should blend Lands’ End men’s, women’s and children’s items within one store-within-a-store or create separate branded destinations within departments. Careful testing would reveal the right tactic. The markdown woes cause me some concern. Lands’ End can attribute a good part of its mail-order success to the favorable economics of a centrally held inventory, which required very few markdowns. Distributing inventory across many S-Mart locations is by definition a risk of capital that Mr. Lampert might want to carefully control. Lands’ End itself has little experience with this particular challenge, so it’s up to Sears merchants… Read more »
M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
15 years 4 months ago

My 24-drawer Craftsman rolling toolchest is packed with Craftsman tools, and my closet is jammed with Lands’ End clothing. (I practically live in their Cobble Cloth pullovers.) Perhaps I’m an anomaly, or perhaps I recognize quality combined with durability.

But I’d hesitate to purchase Lands’ End products in Sears stores because of the service. Lands’ End customer service reps are legendary for their skill. I’ve called in for a certain item and even though their computer listed the item as sold out, the rep has gone back into the warehouse to see if one more unit were somehow available. It was there, and my order was filled. Product knowledge, refunds, and returns are also areas of expertise for them, and they’re always courteous and available, 24/7.

Can the same be said for Sears employees?

Brian Kelly
Guest
15 years 4 months ago

Over the past twenty, maybe forty years, many well intended folks have tried to create relevance for Sears. As we all know, they ALL left Sears frustrated.

Now Eddie, and his ego, have taken up the challenge. Plus he has added two new folks, IBM and McKinsey, to set the course.

The solutions are not brands. The solution is a clearly defined target customer for the outlet. In “stocks to socks,” Sears thought it could be all things to all people. It didn’t work.

Craftsman might be a brand of choice. But it is for a category that is a small percentage of women’s, men’s and kid’s apparel.

In this age of personalization, there isn’t enough lycra to “one size fits all” work ever again. It will require much more heavy lifting to solve the customer/assortment challenge.

Sure glad Eddie got two non-retailers to get him a new solution. Remember, retail ain’t for sissies!

Mark Barefield
Guest
Mark Barefield
15 years 4 months ago

This was tried three years ago when Sears bought Lands’ End. Lacy, the then CEO, wanted a store-within-a-store concept for the product. It rolled out to 100 plus A stores, then the rest of the chain. Bottom line – the concept failed.

Why did it fail? And is there anybody left in the corporate office from two years ago that can remember why it failed?

Sears needs a real merchant with a unified vision for the niche and merchandise mix that will work in today’s retail environment. Currently Sears is trying to bring customers into the store with a mix of very high end (think Lands’ End, Kenmore Elite, Kitchen-Aide) and very low end items like the house GALAXY brand (dollar store to Wal-Mart quality) and off-brand electronic vendors.

Will the Craftsman customer buy a Lands’ End polo? Yes – I am just waiting till the third markdown.

Camille P. Schuster, PhD.
Guest
15 years 4 months ago

Do those consumers buying Craftsman tools currently order clothes from Lands’ End? If not, why would anyone expect them to buy those clothes just because they are available at Sears? Sears needs to be concerned with either providing the kinds of clothes that the people who come to Sears currently purchase elsewhere or finding a way to bring new consumers into Sears to buy clothes they would normally purchase somewhere else. Do the people who buy Lands’ End clothes online want to come into a store to purchase the same items? Just because Sears may have Lands’ End as an asset does not mean that making the product available in a Sears store will work.

Gene Hoffman
Guest
Gene Hoffman
15 years 4 months ago

The first big challenge for Mr. Lampert is being able to get likely buyers of Lands’ End-type of merchandise to come into Sears-owned stores. If he can accomplish that, the odds narrow that it might work. At the moment, Mr. Lempert’s retailing skill is still a riddle wrapped in a mystery inside of an enigma, unlike his skill in extracting a buck in financial matters.

Len Lewis
Guest
Len Lewis
15 years 4 months ago

The whole point of having Lands’ End in Sears is to expand the department store’s customer base. It is a positive move. And who says the people who buy Craftsman tools don’t buy Lands’ End clothes?

The concept may or may not work. But at least offer some encouragement to Sears for trying something new–for trying to raise the level of purchasing by new and existing customers. I would suggest that everyone take a look at some of Sears top of the line “A” stores to see what they’re doing in apparel as well as hardlines. You might be surprised.

Ben Ball
Guest
15 years 4 months ago

Up until now, there has been an open-ended discussion of whether Mr. Lampert was qualified to take over as chief merchant at Sears Holdings. Clearly, the answer is no.

Mark Lilien
Guest
15 years 4 months ago
Lands’ End clothing will have great appeal when sold at Sears if Sears markets it appropriately. If it’s displayed well, if it’s adjacent to the right stuff, if there are convenient places to try it on, if it gets reasonable advertising and signage, etc., it will be fine. If the execution is third rate, it will fail. Will the Sears culture make it a success or kill it? In the 1970’s, I worked for Korvettes, the original American discount store chain. At the time, they had a great reputation for giving away decent hard goods at the lowest prices imaginable, and the clothing was the worst quality imaginable, also at very low prices. The company tried to merge with Alexander’s, a competing discounter that had great clothing at low prices and almost no decent hard goods. The idea was to use the Alexander’s clothing and the Korvettes hard goods to make a complete good quality/low price store. After the authorities stopped the merger for antitrust reasons, Korvettes reorganized the soft goods buying and upgraded the… Read more »
Lori Sudler
Guest
Lori Sudler
15 years 4 months ago

Sears is like a lost child right now. They need an identity and a strategy and then they need to stick to it. What market are they going after? Who do they see as their competition? How are they going to emulate that competition and how are they going to differentiate from them? Every time I see a story about Sears, it points to different answers to these questions. If the market they are going after will buy Lands’ End, then get it in the stores and stick to that plan. If that isn’t the market you are going after, sell it now. But make a decision about who you want to be before the wide range of customers you are currently confusing gets fed up and goes elsewhere.

David Livingston
Guest
15 years 4 months ago

I think this is just more empty hype coming out of Sears-Kmart. Perhaps the same consumers might buy these various brands but, as we all can see, Sears-Kmart has some of the lowest sales per sq. ft. performance of any major retailer. Their customers might like it, but they just don’t seem to have very many customers. Regardless of what Sears-Kmart does, they always say they are “pleased with the consumer response.” With rapidly falling sales, high executive turnover, and a new reinvention plan every 3 months, I’m sure we will be discussing another brilliant idea from Sears-Kmart in a few months and will have forgotten about this one.

Peter Fader
Guest
15 years 4 months ago

More important than the store-within-a-store concept is the critical role of Lands’ End itself. This is one of the better managed assets under Sears Holdings. As a direct marketer, the more analytical approaches they use can be of great value to the rest of the corporation.

So I have no opinion on store-within-a-store, except to the extent that it might amplify (or possibly dilute) the strength of Lands’ End itself.

But if Lampert can use Lands’ End as a model for the rest of the company (rather than focusing too much on folding it into the existing structure), he can succeed. As a value investor, I think he’s smart enough to see this and do it properly.

Mark Hunter
Guest
Mark Hunter
15 years 4 months ago

The concept won’t work long-term. Lampert is only trying this strategy because he doesn’t have anything to lose by doing it. Lampert might say he’s a merchandiser but, in reality, he’s a value investor and will do anything in the short-term to increase the value of his assets.

Mark Burr
Guest
15 years 4 months ago
Certainly, the same consumer that buys Craftsmen tools will buy Lands’ End clothing. It’s nearly a perfect fit. So what’s the problem? The consumer doesn’t want to go there for either one. Like Doc, I too have dozens upon dozens of Craftsmen tools. Many were purchased a considerable time ago. Anything more recent was purchased at what I would call the opposite of their concept here. They were purchased from a ‘store outside of a store.’ Even more recently, I have turned to LL Bean instead of Lands’ End, while still buying LE occasionally. Both, from the phone-in or internet are nearly equal. As I write this, I am wondering what the track record of catalog retailers or net retailers has been when shifting to brick and mortar. Is my inclination accurate that it likely isn’t a very good record? Sears did such an exceptionally poor job executing on the launch of Lands’ End in their stores, it’s likely they won’t get a second chance – few do. It may be simply time for Sears… Read more »
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