Source: Land’s End via Bloomberg

Inside Lands’ End’s Quest for a Younger, Cooler Customer

New CEO Federica Marchionni wants to gain a new kind of customer while keeping her loyal fan base

Gazing over a spread of magazines on a side table in her New York office on Broadway, Federica Marchionni eagerly flips through the pages to find her advertisements inside. For the new Lands’ End chief executive officer, this is her big unveil, the first time she gets to show what she’s been working on since taking the job in February. The meaty September issues in front of her include all the fashion industry staples, ones you wouldn’t necessarily connect with Lands’ End, a label known more for courting mothers and kids than appealing to style-savvy fashion types who read ElleInStyle, and GQ.

Vogue hasn’t arrived yet,” she says.

Lands’ End CEO Federica Marchionni is trying to turn things around at the aging clothing label.
Lands’ End CEO Federica Marchionni is trying to turn things around at the aging clothing label.
Source: Lands' End via Bloomberg

The ad placements represent a bit of a return to Marchionni’s old haunts. Although she’s clad in a striped seersucker suit from Lands’ End, her crimson pumps betray her roots. They’re from Dolce & Gabbana, the Italian luxury fashion house she served for more than a decade, most recently as president of its U.S. operations. There’s little about the 43-year-old, from her tidy blond hair to her lofty Italian accent, that doesn’t ooze glamour and sophistication. Hired to revive the aging label after its spinoff from former parent Sears Holdings, Marchionni is aiming for a younger, cooler crowd, all while keeping loyal suburban parents happy.

“I don’t want to change what is working,” she says, “just tweak whatever is needed to be tweaked.” Founded in 1963, Lands’ End was once a mighty catalog business, the biggest mail-order specialty apparel seller in the U.S. Now it’s trying to recover from a lengthy slog since the Sears acquisition in 2002. Business remained anemic in its final years under the department store, with annual sales steadily dropping from $1.7 billion in 2012 to $1.55 billion in 2015, an almost 10 percent slide. 

So tweak she shall. As Marchionni puts it, she’s trying to “extend the family” that shops for the Lands’ End label. Right now, Lands’ End is still popular among kids and parents. But when children get to high school, they abandon the brand for trendier names such as Forever 21 or H&M. They don’t return to Lands’ End until they become mothers or fathers themselves, a decade or two down the line. This lost period is what Marchionni is aching to fill.

That’s where the ads come in. Lands’ End has two separate marketing campaigns this fall, each targeting different shoppers. One set, appearing at outlets including Good Housekeeping, O Magazine, and the Wall Street Journal, is chock full of family vibes aimed at the traditional Lands’ End buyer. The other set, featured in the style mags’ September books, tries to reach a younger shopper. It depicts men and women out in nature, no kids in sight.

Lands’ End is trying to attract new customers, especially the younger, trendier crowd.
Lands’ End is trying to attract new customers, especially the younger, trendier crowd.
Source: Lands' End via Bloomberg

For the younger shoppers, fit is key, Marchionni says. While Lands’ End won’t be totally overhauling its merchandise selection, it’s working on slimmer silhouettes that appeal more to the young and planning coming lines of shoes and handbags. The clothes will not be trendsetting, but they’ll be on-trend, says Marchionni, who’s been accumulating fashion firepower with high-profile executive hires from Saks Fifth Avenue and J.Crew. “Lands’ End will not be the one who will create the fashion trends,” she says. “But we will make sure that we will be within the fashion trends. And that’s probably what we were missing.”

Marchionni has big plans to expand Lands’ End’s reach. Wholesaling, she says, is one of the “biggest opportunities” for Lands’ End, noting that the brand could possibly sell in any range of department stores, though she declined to share specifics. She envisions dropping Lands’ End flagships in major city centers and opening e-commerce shops in some overseas locales. There’s a genuine push toward digital, as Lands’ End relaunches its website and premieres its first-ever digital catalog. The old mail-order books are getting a makeover, too, with a sleeker style and more modern feel.

The executive is doing all this from her perch in New York, not at Lands’ End’s headquarters in Dodgeville, a tiny Wisconsin town of fewer than 5,000. She takes weekly trips back and forth between the two offices and says she’d never uproot the company from its Midwestern home.

Will the moves work? Lands’ End has tried to seek out younger customers before, albeit under Sears’s purview. In 2009 the brand released a label called Lands’ End Canvas. The assortment of preppy, seafaring classics was meant to introduce a “new generation” to Lands’ End, as one executive put it. The label petered out, closed its only standalone store in 2013, and was later discontinued.

Lands’ End wants to keep its current customers on board—suburban parents who buy clothes for their kids (and themselves).
Lands’ End wants to keep its current customers on board—suburban parents who buy clothes for their kids (and themselves).
Source: Lands' End via Bloomberg

Although that effort fizzled, the Lands’ End brand is broad enough to make a move toward youths, says Alex Fuhrman, an analyst at Craig-Hallum Capital Group. As he sees it, Lands’ End already appeals to such a wide range of shoppers, from kids to older men and women. It even has a strong school uniform business. “It makes sense for them to try to move slightly toward a younger customer,” Fuhrman says. But there’s a caveat: “As long as they stay focused on their existing demographic.”

Marchionni remains adamant about her devotion to Lands’ End’s older flock, the 34- to 54-year-old parents who’ve kept the label chugging along for decades, as alienating them could spell doom. “We will never, ever lose an inch of focus on our loyal customer,” she says.

Fuhrman sees plenty of potential for Lands’ End, pointing at its final years under Sears. As the brand had its marketing budget slashed and customers shied away from Sears stores, the losses “could’ve been worse,” he says. Even now, Lands’ End remains tethered to its former owner in some ways. It still leases space and sells its wares in more than 200 Sears locations. And hedge fund manager Eddie Lampert, Sears’s CEO and top shareholder, owns a big chunk of Lands’ End through his firm ESL Investments. Shares have dropped to $23 a share, a more than 50 percent tumble from a high of $55 in January.

Marchionni feels the pressure to rev things up fast. “We became impatient, all of us,” she says. “No one is patient anymore, starting with the investors.”

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