Lands’ End’s sales declines stretch across online, catalogs and stores

September 3, 2016 12:00 PM

Sales slipped across the board for Lands’ End in the second quarter, but the apparel and accessories retailer says it has several initiatives aimed at changing course.

Direct sales, which consist of online and catalog orders, declined 6.9% in fiscal Q2 ended July 29 to $246.4 million from $264.7 million in the same quarter a year ago, Lands’ End, No. 44 in the Internet Retailer 2016 Top 500 Guide, reported Thursday. For the first six months of fiscal 2016, direct sales fell 7.6% to $478.6 million from $518.1 million.

“May and June were significantly improved versus our prior trend, but that improvement was offset by a disappointing July,” chief operating and financial officer James Gooch said on the earnings call. “In May and June combined, we realized a significant improvement in trend in our customer metrics, with a slight increase in active buyers and double-digit increase in reactivating lapsed buyers. We recognize that we still have a lot of work to do,” he said.

“On the commerce front, we have continued to roll out our multibranded website shopping experience,” president and CEO Federica Marchionni told analysts on the earnings call, according to a Seeking Alpha transcript.

“In addition to an online segment dedicated to our Canvas by Lands’ End brand, we recently launched additional segments dedicated to our Lands’ End Sport, school uniform, business outfitters and Lighthouse brands. These efforts are designed to expand brand awareness for Lands’ End overall and broaden our customer base,” she said. “We can now leverage this differentiated site to target consumers with a more personalized experience.”

Later this month, the retailer will start selling some of its lines on Inc. “This provides an additional channel for us to introduce consumers to our new brand and expanded category,” Marchionni said

Lands’ End also will launch a new mobile app and make improvements to the e-commerce site in time for the holiday season, she said, though she did not specify the changes.

The retailer operated a pop-up store in Southampton, N.Y., in August, and it plans to open a pop-up location in New York City’s SoHo neighborhood during Fashion Week, Sept. 7-14, which will stay open through the holiday season, Marchionni said.

The retailer also is collaborating with social media influencers, such as fashion bloggers, to increase brand visibility, she told analysts. “We have also formed a digital media partnership to create a custom four-week social program to drive awareness and engagement with select publications, prioritizing historical best performance with social expansion capabilities,” she said, but did not name the publications.

For the fiscal second quarter ended July 29, Lands’ End also reported:

  • Direct sales (online and catalog) of $246.4 million, down 6.9% from $264.7 million in fiscal Q2 2015.
  • Retail sales of $45.5 million, down 4.4% from $47.6 million.
  • Net revenue of $292.0 million, down 6.5% from $312.4 million.
  • Net loss of $1.98 million compared with a net gain of $7.46 million.

For the first six months of fiscal 2016, Lands’ End reported:

  • Direct sales of $478.6 million, down 7.6% from $518.1 million in the year-ago period.
  • Retail sales of $86.7 million, down 7.4% from $93.6 million.
  • Net revenue of $565.4 million, down 7.6% from $611.8 million.
  • Net loss of $7.74 million compared with a net gain of $9.19 million.



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