Lands’ End is looking to get out of Sears like a bat out of hell
Lands’ End simply cannot do this Sears thing anymore. The outdoor-influenced clothing retailer has announced that it is closing the remaining 40 store-within-a-store locations it operates inside the department store chain, after reducing the number from 174 at the beginning of last year.
“We’re looking to exit as quickly as possible,” Lands’ End CEO Jerome Griffith recently told the Chicago Tribune. “We’re not in their [Sears’] long-term plans, and they’re not in ours.”
Lands’ End has found its footing since being spun off by Sears Holdings in 2014. The company has posted seven consecutive quarters of revenue gains and six consecutive with positive earnings before interest, tax, depreciation and amortization (EBITDA).
On the retailer’s fourth quarter and full year earnings call in March, Mr. Griffith pointed to Lands’ End digital sales growth as a significant factor in its past and future gains.
“We focused on our internal and external search efforts, improved mobile site speed and leveraged the price clarity across all platforms,” Mr. Griffith told analysts (via Seeking Alpha). “We are pleased that these efforts contributed to an increase in e-commerce sales in the fourth quarter led by double digit U.S. e-commerce sales growth.”
Lands’ End has been able to prosper over the past year because it has succeeded in attracting new customers and retaining those who regularly shop from the retailer. This is particularly true in digital commerce where Lands’ End has used a “test and learn approach” to become more responsive to the needs of its customers, according to Mr. Griffith.
“Sales on mobile devices grew more than three times as fast as the total. In fact, during the quarter, mobile traffic exceeded desktop traffic for the first time,” he said. “These efforts further paid off as our customer file once again increased double digits in the quarter, reflecting double digit growth in new customer acquisition.”
The retailer has also benefited from selling its merchandise on third-party marketplaces, including Amazon.com. Lands’ End began sales on Amazon in 2016.
The recent success of Lands’ End is not entirely dependent on digital channels, however, with the retailer posting double-digit comps for stores open at least a year in the fourth quarter. The chain opened five new stores last year with plans to open between 10 and 15 new standalone locations this year. Longer term, Lands’ End is looking to open between 40 and 60 new locations over the next few years.
- Lands’ End severing its links with Sears – Chicago Tribune/Portland Press Herald
- Lands’ End is breaking up with Sears for Amazon – The Real Deal
- Lands’ End, Inc. CEO Jerome Griffith on Q4 2018 Results (Earnings Call Transcript) – Seeking Alpha
- Will Lands’ End hit pay dirt on Amazon? – RetailWire
- Sears spinning off Lands’ End – RetailWire
DISCUSSION QUESTIONS: What do you think are the keys to Lands’ End success over the past couple of years? What will it need to do to sustain the positive arch it is currently on?