Lands’ End CEO Jerome Griffith on the company’s product strategy

0

CEO Jerome Griffith spoke to Modern Retail after Thursday’s Lands’ End earnings call, sharing the company’s plans for growth despite ongoing macroeconomic challenges. Second-quarter revenue was down 9% to $351.2 million, from a record $384.1 million during the same period in 2021 — but that’s still an 18% increase from the previous quarter. pre-pandemic second quarter in 2019.

Looking ahead, Griffith said the brand intends to expand into the intimate apparel space with a soft launch this fall. The company will also continue to invest in leisurewear trends popularized during the pandemic, releasing new styles of clothing that are comfortable but appropriate for the office, Griffiths said.

Griffith spoke to Modern Retail about these trends and what else awaits the traditional retailer in the crowded apparel space. space. This conversation has been edited for clarity and length.

What stood out to you about the company’s results in the second quarter?
We had some very successful parts of the business. Our third-party business, which has grown over the past few years, has done extremely well. We were up about 43%. And our uniforms business, which is divided into three sections – these are school uniforms, our national accounts, and small and medium-sized businesses – pulled some volume from the third quarter into the second quarter. Because parents understand that if they don’t order soon enough, supply chain issues that exist or worker issues that exist can delay their shipments. So they were buying a little earlier this year than they did last year.

Additionally, we have raised prices somewhat because our average unit costs have increased over the past six to 12 months. And we haven’t had much opposition from our customers.

Our largest product category, swimming, continued to perform relatively well for us. It’s a very big part of our business. And we were thrilled because every year this season seems to get a little longer.

Comparing the drop in the second quarter of this year to that of last year, is it due to consumer habits or because 2021 was a big year for e-commerce due to the pandemic?
[The] The second quarter of 2021 was a record for us among all quarters two. So you saw a few things happen. You’ve seen people shop a little less online, but you’ve also seen them tighten their belts because they’re hit with higher energy and food costs, so their shopping habits have something little changed. What we find, however, is that our conversion rates are still very high. And the people who log on are there to buy something.

You highlighted the strong growth in the third party sector. How do you develop those relationships and how does that propel your business right now?
If you go back four or five years, you could buy the Lands’ End product from two places, LandsEnd.com and Sears. And the relationship with Sears wasn’t exactly ideal because Sears’ customer characteristics didn’t overlap with Lands’ End customer characteristics, so there wasn’t a very good synergy there. We believe, as one of the pillars of our growth strategy, that we want to be a Unitary Challenge Distributor, which means we want to sell to our customers where our customers buy. Our customers shop at Amazon and Walmart and Kohl’s and Target, and we want to be where they spend their money because they spend their money there for a reason.

We expanded to Kohl’s because we knew our customers were buying from Kohl’s and that Kohl’s primarily sold clothing. And we not only went to the market, but also to physical sites with them. We’ve seen a kind of symbiotic relationship because if you’re in the physical locations, you become more relevant because you’re there. And this in turn helps to increase market activity. And then we opened in the last few months in Target and QVC, and we will continue to expand our market.

We do it really well. We have the technology to do it very well. We ship from our own warehouses, and it’s pretty transparent to the consumer.

What can you share about the different strategies or product offerings you will be launching in the coming quarters?
We start with intimate apparel. We haven’t worn this in the past. We have very good technical designers with real technical know-how and how to put together swimsuits. And this is directly linked to what is happening in the intimate. So we’re doing a soft launch this fall, a bigger launch in the spring.

We really leaned towards versatile garments that you can wear to work, but are also very comfortable. It seems to be a trend in the market. And we are getting good first results in the fall thanks to that.

On the lingerie side, do you see a lot of opportunities as a growth sector, and where do you see Lands’ End fitting in among the new DTC lingerie brands?
It was something our customers were asking for and we didn’t offer. So we believe there has been enough disruption in this industry, that there is opportunity for customers who have already shopped with us, but are buying their underwear elsewhere.

Was there a similar demand from customers for more comfortable workwear?
Comfort worked very well for us when the pandemic hit, from April 2020 to July and August of last year. But you figured that when people start going back to the office, they’re going to have to have more versatile clothes. You can’t wear sweatpants to the office. I mean, you can, but people don’t want to do that. But they don’t want to give up the comfort side either. So we went out and researched new, more comfortable and stretchy fabrics that people seem to like, and it seems to resonate with them.

When you look to the next few years, what are the biggest growth areas and challenges for apparel?
I think you can probably get a jolt – people and apparel manufacturers that haven’t been able to manage their inventory as well, or companies that were poorly capitalized based on what’s going on in the economy today today. And I think the people who are going to survive will really be the best capitalized with the best ideas and the most flexibility.

Customer tastes can change very quickly and you need to be able to change with it.

Share.

Comments are closed.