Lands' End defines strategy following disappointing third quarter

By

Obi Anyanwu

Published
Dec 5, 2016

Lands’ End has been in a restructuring phase following the departure of Federica Marchionni. The former CEO stepped down from the company in September after serving in her role for 19 months, and she was succeeded by co-interim CEOs Joseph Boitano and James Gooch.

 
According to Boitano, Lands’ End now has a clearly defined strategy in place. “Our first priority is to enhance our classic offering with a focus on key categories that reflect the Lands’ End brand heritage with great quality, fit and value,” he said. “We have also refined our marketing strategy with enhancements to our catalog presentation and social media efforts. Taken together, we believe these initiatives will position us to better engage our customers, win back lapsed customers and attract new customers to Lands’ End.”
 
The third quarter was “disappointing” for Lands’ End, which posted a decrease in net revenue to $311.5 million and a net loss of $7.2 million, or $0.23 per diluted share. The net loss included costs related to Marchionni’s departure.

Gross margin was 42.9% compared to 48.6% in the previous third quarter and adjusted EBITDA was $1.3 million compared to $26.5 million in the prior year.
 
Direct segment net revenue decreased 5.5% to $272.1 million and retail segment net revenue decreased 15.6% to $39.3 million due to a 14.3% decrease in same store sales and fewer Lands' End Shops at Sears.
 
Gooch concluded, “While we are disappointed in our third quarter sales and gross margin results, we aggressively managed our costs and ended the quarter with clean inventory levels. Following an in-depth review of our recent performance, we have developed and begun to implement a number of initiatives that we believe will enable us to better execute our business strategies and drive improved financial performance. We were pleased to see some of these initiatives begin to take hold in the second half of the quarter, and look forward to building upon this momentum during the holiday season and beyond.”