Sears stores find a fit for Lands’ End

Oct 01, 2007 9:30 PM  By

Sears Holdings Corp. has taken a lot of heat during the past five years for the way it’s handled the integration of the Lands’ End apparel catalog brand. But the retailer seems to have found a strategy that works: the store-within-a-store.

After unveiling the concept in 2005, Sears now aims to double the number of Lands’ End stores-within-a-store from 100 to 200 by the end of the current fiscal year.

Sears officials won’t divulge financials, but top management is clearly on board with the strategy.

In a March 1, 2007, letter to shareholders, Sears chairman Edward S. Lampert said that the company “saw a significant improvement in the profit performance of Lands’ End merchandise in our Sears stores. With a new leadership team and a more integrated approach to working across Sears Holdings, the business is moving in the right direction. Our customers are embracing the opportunity to buy Lands’ End quality merchandise in our stores, on the phone, and on the Internet, and we are working hard to make Lands’ End available across more of the chain.”

The Lands’ End shops measure about 10,000 sq. ft. and use navy blue signs and columns to create a look distinct from the rest of Sears. The shops also have a lounge area with a couch and a computer kiosk for ordering over the Internet, with an offer of free home shipping if the item isn’t in the store.

“Lands’ End is a very important brand for us here,” says Sears spokesman Christian Brathwaite. “The idea is to enhance the customer experience and make it easy for customers to shop for Lands’ End apparel coupled with the Lands’ End service model. We’ve seen a very positive customer response.”

Sears acquired Lands’ End in 2002 for $1.9 billion, and five months after the purchase began introducing Lands’ End merchandise to 183 of its stores. By fall 2003, all 861 Sears full-line stores carried Lands’ End products.

But many industry watchers criticized the way the brand was promoted and displayed in the department store locations.

For instance, Lands’ End merchandise was typically spread throughout the Sears’ stores, making it more difficult to locate items.

Indeed, Brathwaite says the idea behind the store-within-a-store concept was to better present the Lands’ End brand. “We have trained store associates who specialize in Lands’ End merchandise. The ability for customers to shop multichannel inside the stores is something we’ve also been pleased with so far.”

Christopher T. Shannon, managing director at New York-based investment bank Berkery, Noyes & Co., observes that the store-within-a-store concept seems to be gaining in popularity. There’s been a “rise in demand from the public for more specialty retailers. I believe the goal is to have more of a one-on-one relationship with the end-buyer and offer as many different ways to make a purchase as possible.”

Regarding Sears and Lands’ End, Shannon notes: “It helps Lands’ End sell more product through more exposure, and it helps Sears by adding another great brand in their stores in a creative way.”