A little more than two years since it bought Lands’ End, Sears is still working on how to make the most of its investment. After a gradual retail roll-out that began in late 2002, selected Lands’ End clothes became available in all of Sears’ more than 875 full-line stores last year. But in an analysts’ conference in late July, Sears chairman/CEO Alan Lacy admitted that the clothes weren’t selling well in more than a third of those stores.
“When we first bought Lands’ End, we thought it would be a good addition to our stores, that it would be a differentiating brand,” Lacy said during the call. But the brand is not a hit in many of the stores — mostly those in lower-income areas. So in the “so-called bottom 300 stores,” Lacy said, “we’re reducing — not eliminating — Lands’ End merchandise.
Sears spokesperson Chris Brathwaite says that the company is “strategically modifying” Lands’ End’s presence in some stores. “We’ve cut back slightly in Lands’ End kids’ clothing — mostly in infants and toddlers,” he says. “But Lands’ End is still a cornerstone of our business that will do more than $2 billion in sales this year.” In fact, as Lacy pointed out, some 300 stores in higher-income areas are reporting strong sales of Lands’ End goods and will carry a broader range of the brand going forward.
To best exploit the Lands’ End brand at retail, the company may want to go beyond merely tweaking the product selection in its stores, says Sid Doolittle, founding partner of retail consulting firm McMillan Doolittle.
“In the stores where Lands’ End is doing lousy,” Doolittle says, “maybe Sears should find a test group of stores to experiment with; try doing a great job with presentation in those stores and see if it helps.” In many of the stores, he says, the Lands’ End clothing doesn’t stand out. Often the clothes are laid out alongside those of Sears’s other house brands, such as Mainstreet Blues, All American Comfort, and Only Necessities. The line doesn’t have much impact, Doolittle says, “because it’s sort of scattered around.”
What’s more, having pricier Lands’ End clothes alongside some of Sears’s lower-end brands can be “kind of jarring” to customers, Doolittle says. “You see $10, $20 items, then all of a sudden you see a similar item by Lands’ End for $40, and whoa! Where did that come from?”
Another option for Sears, Doolittle says: testing Lands’ End stand-alone stores. “There are plenty of opportunities out there,” he says. “Lands’ End could become an interesting specialty store.”
Then again, retail may not be Lands’ End’s only problem. During the analysts’ call Lacy said that Lands’ End catalog sales were soft for the first half of the year. “We still have the cannibalization effect of the stores — and the sales tax now being charged” for Lands’ End merchandise, he said. “And we made some circulation reductions for the first half.”