Fashion

Lands' End, Sans Sears, Looks Like the Future of Retail


Lands’ End (LE), having cast off from the albatross that is Sears (SHLD), is moving along at a fast clip.

In its first quarter since being spun off from the troubled giant, Lands’ End said sales ticked up 3.6 percent, to $331 million, compared with the year-earlier period, while profit surged 48.1 percent, to $11 million.

Notable were the lack of big expenses that sometimes come with plotting a solo course. The company’s cost of materials was pretty steady, as was the amount it spent on sales and administrative overhead. The only significant added expenses were interest costs tied to a new loan Land’s End took for its spinoff.

There was some evidence the lack of steering from Sears helped the brand. The company said it was able to take a more nuanced and focused approach to promotions.

Turns out, despite more than five decades of business and years in the decidedly dated closet of Sears brands, Lands’ End has the look of a thoroughly contemporary retailer.

For one, it’s almost entirely virtual. Even though there are still some 251 Lands’ End shops in Sears stores, and another 14 standalone locations, 84 percent of the company’s revenue is coming from Internet and catalogue orders.

The company also seems to get the Web in a way the contemporary cool kids of e-commerce do. It has a clean, curated blog, an eclectic Tumblr (featuring Marilyn Monroe in a potato-sack dress) and 16,000 Twitter followers—not shabby relative to L.L. Bean’s 27,000.

In terms of product, Lands’ End peddles “timeless style.” And though it has some misses on that front (like this tie-dye Polo), its designers don’t stray far from the strategy. Lately, it’s on trend in a few categories, including short swim trunks, unconstructed blazers, and pin-straight pants for women.

The whole classic brand strategy is buttressed by the fact that Lands’ End still has its headquarters in the heart of America—just west of Madison, Wis. It’s an area the lumberjack dandies of Soho and Tokyo typically only dream about, not unlike Bean’s roots in Maine.

This morning, however, the brand is particularly hot on Wall Street; its stock shot up almost 18 percent.

Kyle-stock-190
Stock is an associate editor for Businessweek.com. Twitter: @kylestock

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Companies Mentioned

  • LE
    (Lands' End Inc)
    • $34.48 USD
    • 0.26
    • 0.75%
  • SHLD
    (Sears Holdings Corp)
    • $34.8 USD
    • -0.66
    • -1.9%
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