May 24, 2013
Will Lands’ End Finally Prosper Under Sears Holdings?
Lands’ End celebrated 50 years in business earlier this week. The chain, which got its start as a mail-order operation in Chicago in 1963, gained fame, in part, because of its unconditional satisfaction guarantee and with high levels of customer service that remain with the chain today under the ownership of Sears Holdings.
"We are extremely proud of our heritage and are looking forward to giving our customers exceptional quality and value for the next fifty years," said Edgar Huber, CEO and president of Lands’ End, in a press release.
In an interview with WWD, Sears Holdings CEO Edward Lampert said he was looking for Lands’ End to grow from a $3 billion business to $5 billion by globalizing the brand. To date, Lands’ End has a physical presence in three countries outside the U.S. — Germany, Japan and the U.K. Mr. Lampert sees opportunities for Lands’ End to expand its footprint to other countries either on its own or perhaps with partners.
The company has invested in remodeling the Lands’ End store-within-a-store concept inside Sears as well as standalone units.
"I believe the physical representation should be something that matches the online digital presentation," Mr. Lampert told WWD. "We have made a large investment to bring that to life. Integrated retail is still not second nature. It’s something that we are still refining."
Last year, the New York Post reported that Mr. Lampert was seeking a buyer for Lands’ End that would license the brand back to Sears. It was not the only time a sale was rumored for the company, which many have seen as a bad fit with Sears Holdings since it was acquired back in 2002.
Mr. Lampert told WWD that the merger with Lands’ End was hindered by a "conservative culture" that failed to develop a "plan to integrate Lands’ End into Sears in any way."
In a March 2012 RetailWire poll, 70 percent said they believed Lands’ End could succeed if it were no longer part of Sears Holdings.
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Recent Discussions
Discussion Questions
What is your assessment of the challenges and opportunities in front of Lands’ End today? Describe what you see as the brand’s path to success?
Poll
Lands’ End is a successful brand and will remain so as long as it doesn’t become like Sears. LE cares about its customers, offers great customer service, and good products at a fair price. Lampert and crew could learn from Lands’ End.
Seems to me that one of the biggest opportunities for Sears, which has probably long since passed, is to learn from the culture and legendary customer service at Lands’ End. I have never had a bad experience shopping them online and returns are extremely easy. If Sears/Kmart could extrapolate that service culture into their stores and brands, they might have a shot at being around a few more decades, and possibly even thriving.
The greatest challenge to Lands’ End today is Eddie Lampert’s temptations to manipulate the assets and controls. With Mr. Lampert as CEO, Sears just reported another poor quarter and it has been reported that he wants or needs to sell some assets. Does that include Lands’ End? Conceivably.
So far Lands’ End has has been left alone by Sears and succeeds but the pressure is mounting on Sears to do “something.” Does that mean deja vu all over again? Lands’ End path to success is being able to remain independent. That might be in jeopardy. May Sears and Lands’ End conflicting twain never have to meet.
I’ll never forget the day I called Lands’ End and said “I need something you carry that doesn’t appear in the catalog,” and the operator at the other end found it and sold it to me.
Sears made a great move by leaving Lands’ End alone. Now, if only they could empower Sears sales associates the way Lands’ End does….
Edward Lampert spoke to WWD about “Lands’ End-izing Sears, not Sears-izing Lands’ End.” Let’s hope for both Lands’ End and Sears, he’s actually intent on making that happen.
Pre-Sears, Lands’ End pioneered radical virtual customer service and paved the way for others, including much-lauded Zappos. The company’s notorious attention to product quality sealed the deal with its loyal customer base.
Mr. Lampert’s culture hurdle complaints come off as a weak excuse given the history and Sears’ parental role in the deal. Licensing Lands’ End this way will only serve to dilute whatever remains of its brand equity. Sears has continued to test and deploy new data and digital initiatives. My vote would be to leverage those capabilities to create tightly-curated, low to no-inventory digital hubs ala Bonobos. Lands’ End is perfect for this type of set-up…but the brand equity clock is ticking.
“…which many have seen as a bad fit with Sears Holdings since it was acquired back in 2002.”
No kidding. The only thing that Sears clearly brought to LE was the requirement to collect sales tax in Sears’ states (which is just about all of them). The intention, of course, was that the acquisition would make Sears more upscale, but there’s only so much one brand can do. If you tie a balloon to a pebble, it will lift them both up; if you tie it to a boulder, they’ll both sink.
“As long as Eddie stays out of it” doesn’t sound like much of a business plan, but I suspect most of us feel it will be the heart of any successful strategy.
I’m afraid that Lands’ End quality is starting to slip. Perhaps too much Sears influence? The brand is strong and I love their service and design. If only I can continue to count on LE quality….
I’d like to comment on Mr. Lampert’s assertion that Sears did not have a “plan to integrate Lands’ End into Sears in any way.” This is absolute nonsense.
I was the head of strategy at Sears when Lands’ End was acquired and played a key role in the assessment of the Lands’ End deal and ultimately led the integration team. Prior to the deal, extensive consumer research and planning was done, focused on the integration and roll-out of the Lands’ End product team. In addition to the dozens of integration team members, we were also assisted by a large team of Bain consultants. I had an office at Lands’ End’s headquarters for a time and there were multiple tracks of Sears and Lands’ End executives to facilitate all aspects of the integration.
Having said that not all went smoothly to be sure. A recommendation to do more testing before aggressively expanding Lands’ End product to more Sears stores was not adopted. Initial inventory levels were too high and marketing was woefully inadequate.
While I left Sears late in 2003 and was not around for subsequent actions that certainly affected both Sears and Lands’ End’s ability to meet their potential, it is not fair to the many Sears and Lands’ End team members who worked extremely had for 18 months to bring the new strategy to life.
The one thing that is true is that Mr. Lampert has had many years now to address the issues at Sears (and Lands’ End) and to somehow blame today’s performance on actions that he believes should been taken in 2002 and 2003 is absurd.
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Lands’ End is a successful brand and will remain so as long as it doesn’t become like Sears. LE cares about its customers, offers great customer service, and good products at a fair price. Lampert and crew could learn from Lands’ End.
Seems to me that one of the biggest opportunities for Sears, which has probably long since passed, is to learn from the culture and legendary customer service at Lands’ End. I have never had a bad experience shopping them online and returns are extremely easy. If Sears/Kmart could extrapolate that service culture into their stores and brands, they might have a shot at being around a few more decades, and possibly even thriving.
The greatest challenge to Lands’ End today is Eddie Lampert’s temptations to manipulate the assets and controls. With Mr. Lampert as CEO, Sears just reported another poor quarter and it has been reported that he wants or needs to sell some assets. Does that include Lands’ End? Conceivably.
So far Lands’ End has has been left alone by Sears and succeeds but the pressure is mounting on Sears to do “something.” Does that mean deja vu all over again? Lands’ End path to success is being able to remain independent. That might be in jeopardy. May Sears and Lands’ End conflicting twain never have to meet.
I’ll never forget the day I called Lands’ End and said “I need something you carry that doesn’t appear in the catalog,” and the operator at the other end found it and sold it to me.
Sears made a great move by leaving Lands’ End alone. Now, if only they could empower Sears sales associates the way Lands’ End does….
Edward Lampert spoke to WWD about “Lands’ End-izing Sears, not Sears-izing Lands’ End.” Let’s hope for both Lands’ End and Sears, he’s actually intent on making that happen.
Pre-Sears, Lands’ End pioneered radical virtual customer service and paved the way for others, including much-lauded Zappos. The company’s notorious attention to product quality sealed the deal with its loyal customer base.
Mr. Lampert’s culture hurdle complaints come off as a weak excuse given the history and Sears’ parental role in the deal. Licensing Lands’ End this way will only serve to dilute whatever remains of its brand equity. Sears has continued to test and deploy new data and digital initiatives. My vote would be to leverage those capabilities to create tightly-curated, low to no-inventory digital hubs ala Bonobos. Lands’ End is perfect for this type of set-up…but the brand equity clock is ticking.
“…which many have seen as a bad fit with Sears Holdings since it was acquired back in 2002.”
No kidding. The only thing that Sears clearly brought to LE was the requirement to collect sales tax in Sears’ states (which is just about all of them). The intention, of course, was that the acquisition would make Sears more upscale, but there’s only so much one brand can do. If you tie a balloon to a pebble, it will lift them both up; if you tie it to a boulder, they’ll both sink.
“As long as Eddie stays out of it” doesn’t sound like much of a business plan, but I suspect most of us feel it will be the heart of any successful strategy.
I’m afraid that Lands’ End quality is starting to slip. Perhaps too much Sears influence? The brand is strong and I love their service and design. If only I can continue to count on LE quality….
I’d like to comment on Mr. Lampert’s assertion that Sears did not have a “plan to integrate Lands’ End into Sears in any way.” This is absolute nonsense.
I was the head of strategy at Sears when Lands’ End was acquired and played a key role in the assessment of the Lands’ End deal and ultimately led the integration team. Prior to the deal, extensive consumer research and planning was done, focused on the integration and roll-out of the Lands’ End product team. In addition to the dozens of integration team members, we were also assisted by a large team of Bain consultants. I had an office at Lands’ End’s headquarters for a time and there were multiple tracks of Sears and Lands’ End executives to facilitate all aspects of the integration.
Having said that not all went smoothly to be sure. A recommendation to do more testing before aggressively expanding Lands’ End product to more Sears stores was not adopted. Initial inventory levels were too high and marketing was woefully inadequate.
While I left Sears late in 2003 and was not around for subsequent actions that certainly affected both Sears and Lands’ End’s ability to meet their potential, it is not fair to the many Sears and Lands’ End team members who worked extremely had for 18 months to bring the new strategy to life.
The one thing that is true is that Mr. Lampert has had many years now to address the issues at Sears (and Lands’ End) and to somehow blame today’s performance on actions that he believes should been taken in 2002 and 2003 is absurd.