I blogged about Lands’ End a bit over two weeks ago. Their financial performance was reported yesterday and the news again is not good. Lands’ End posted a $5.8 million QUARTERLY loss. This quarter was the 7th straight quarter of declining sales on a year-over-year basis.
The Lands’ End CEO, Federica Marchionni, said the latest results were “disappointing” but that she was “encouraged by some of the positive signs we’re seeing”. Marchionni took over the helm of Lands’ End in February 2015. She has been the CEO for five quarters plus and it is during that period when she is trying to re-make Lands’ End into a more trendy and stylish purveyor that it has still suffered losses every quarter. There had better be some “positive results” vs. simply “positive signs” if this company is to pull itself out of the dive and be restored to a profitable status. Declining sales do not often contribute to profits unless the declining sales are only found in unprofitable lines. Even as the sales decline had been apparent, the brains cut back on the catalogs that were producing most of what sales volume the company had. Now they promise to begin to “methodically rebuild circulation” of the catalogs. That may or may not help. It will increase costs and there is no assurance that the former catalog buyers will return to the fold.
The thousands of Lands’ End employees and their families must be very concerned as they should be. The remake of Lands’ End from a traditional clothier to a more stylish clothier seems to be failing miserably, so far at least, and neither the CEO or the Chairman seem, from all outward appearances at least, properly concerned.
The new line of clothing, Canvas by Lands’ End, is supposedly the savior of the company. If that is the case, this line needs to take off quickly.
Maybe the fact that she has remained in New York City relates to her fear that she will not succeed in pulling the company out of its slide in time to save it. Maybe she is every bit as good as she was billed to be at her hiring and this make-over is simply going to take more time to begin to bear fruit. If the latter is the case, I hope there is a genuine “deep pocket” promise involved that will keep this company alive through the period it takes to regain its footing.
This story simply has the earmarks of a bad outcome waiting to happen.