Strategy

Lands’ End’s Loss More Than Doubles to $94M

The retailer's new CEO is planning to "put more resources toward running a great e-commerce business as opposed to running a great catalog business."
Matthew HellerMarch 22, 2017
Lands’ End’s Loss More Than Doubles to $94M

Lands’ End’s losses more than doubled in the fourth quarter but the struggling apparel retailer’s new CEO said its fortunes could improve if it leverages its “iconic brand heritage” and e-commerce platform.

For the quarter ended Jan. 27, Land’s End posted a net loss of $94.8 million, or $2.96 per share, compared with a net loss of $39.5 million, or $1.23 per share, during the same period last year.

Adjusted net income, excluding a previous $173 million write-down of the Lands’ End trade name, was $13 million, or 41 cents per share, beating analysts’ estimates of 35 cents a share. But revenue slid 3.1% to $458.8 million, from $473.5 million while same-store sales dropped 1.7%.

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“Lands’ End continues 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,” RetailDive said.

But Jerome Griffith, who took over as CEO earlier this month, noted that the company “saw sequential improvement in our fourth quarter results, attributable to recent initiatives across merchandising, marketing and e-commerce.”

“In order to drive long-term success, we need to strengthen our competitive position and develop and execute a strategic plan that leverages our iconic brand heritage, as well as our well-established e-commerce platform,” he added.

For 2016 as a whole, Lands’ End’s net revenue from its direct segment, including catalog and e-commerce, fell 5.4% to $1.15 billion, while retail segment net revenue fell 8.9% to $186.4 million.

“As much as the retail part of the business is under pressure, Lands’ End is fortunate that its direct business accounts for the bulk of sales,” GlobalData Retail managing director Neil Saunders said. “While sales are not yet growing, we attribute the slower pace of decline in direct to some of the improvements made to both catalogs and the e-commerce operation.”

Griffith’s priorities include expanding the firm’s e-commerce team. “We could do a better job and put more resources toward running a great e-commerce business as opposed to running a great catalog business,” he said in an earnings call.