New Lands’ End CEO Delivers High Fashion – and a Culture Clash

At the catalog retailer, frumpy duds are out, strappy heels are in; ‘It doesn’t look like Lands’ End anymore’


Lands’ End Chief Executive Federica Marchionni appeared on Fox Business Network last June to discuss her outlook for the brand. PHOTO: RICHARD DREW/ASSOCIATED PRESS

By SUZANNE KAPNER

Soon after taking the helm at Lands’ End Inc. in February 2015, Chief Executive Federica Marchionni sought to reassure employees she could relate to the beleaguered marketer of casual clothing.

During a town-hall meeting at the company’s Dodgeville, Wis., headquarters, the new CEO, a former Ferrari and Dolce & Gabbana executive, said the area’s cornfields and rolling hills reminded her of Santa Severa—the seaside village near Rome where she grew up.

That said, Ms. Marchionni spends only about one week a month in Dodgeville, as per her employment contract, preferring an office in New York. In presentations, according to people who attended, Ms. Marchionni derided the company’s boxy sweaters and baggy pants as “ugly,” asking “Who would wear that?”

The CEO ordered up a slate of new ads to run in the September issue of Vogue and other fashion titles. She commissioned celebrity photographer Bruce Weber to shoot a major holiday campaign. The full-page newspaper and magazine inserts showed patrician-looking models in coastal settings. Spiked red heels now featured alongside comfy slip-on moccasins.

All this has been a shock for a retailer known for its familial corporate culture and wholesome style. “It doesn’t look like Lands’ End anymore,” said Lee Eisenberg, the company’s creative director from 1999 to 2004. “There was never the implication that if you wore Lands’ End you’d be on a beach on Nantucket living the perfect life.”

A color-blocked dress from the new Canvas line, above, was designed with a younger, fashion-forward customer in mind. PHOTO: LANDS’ END

Aging chains targeting Middle America, including Lands’ End, J.C. Penney Co. and the Gap Inc., are searching for their place in the retail world. They’re squeezed on the higher end by brands such as Michael Kors Holdings Ltd. and Coach Inc., which sell a luxurious image at relatively affordable prices. On the lower end, fast-fashion retailers including Hennes & Mauritz AB are churning out inexpensive, runway-inspired styles.

Ms. Marchionni, who answered questions in an interview and with written comments, said her mission “is to evolve Lands’ End into a meaningful, global lifestyle brand.”

The second CEO to run the outfitter since its spinoff from Sears Holdings Corp. in 2014, she acknowledges the challenge is to lure new customers without alienating loyalists. As part of that process, she aims to complement the catalog’s turtlenecks and elastic-waist pants with more fashionable items.

Responding to Ms. Marchionni’s comments about some items being ugly, a Lands’ End spokeswoman said the CEO is always pushing to improve design so that clothes are comfortable and also flattering.

Hoping to stem falling sales and profits, Ms. Marchionni has shed unprofitable catalog subscribers, is testing a lower-priced line to be sold only in Sears stores and tapped a Vogue stylist for input. The company recently relaunched a brand called Canvas, which offers the sort of modern attire that a young Zara or a J. Crew customer might buy.

Analysts generally applaud Ms. Marchionni’s efforts to update the brand’s image by adding more trendy merchandise.

“Lands’ End, the way it was going, was underperforming,” said Steven Marotta, a senior vice president of equity research with C.L. King & Associates. “Something had to change.”

A red strappy sandal, at right, is a stark departure from Lands’ End more traditional footwear. PHOTOS: LANDS’ END;

The early going has been rough, however, and the company’s share price has fallen by more than a third since Feb. 17, 2015, the day the new CEO started her job.

Lands’ End swung to a $19.5 million loss in the year ended Jan. 29. That compares with a profit of $73.8 million the previous year. Excluding a $98.3 million charge to reflect a lower value of the Lands’ End brand name, the company would have earned $40.4 million last year. In the same period, revenue fell 8.7% to $1.4 billion.

“I’m not interested in their new stuff,” said Carol Rygh, a 56-year-old from Brea, Calif., who has been a Lands’ End customer for 20 years. “They’re adding too much fashion.”

Ms. Marchionni acknowledged she is feeling pressure to start delivering results.

“I have learned that, even if I am trying to get some results in the midterm, people tend to judge you for the short run,” she said. “Normally, you see results after two to three years, but we are working hard in making results start to happen this year.”

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