Wednesday, October 30, 2013

The Sears Way: Kill the Lands End Brand, Then Spin It Off to the Public.

My family and I were early customers of Lands End.  Did they sell the same kinds of polo shirts, trousers, and oxford dress shirts as many other retailers?  Yes.  But, the company's value proposition and culture were totally different, and once we were sold on this, our family could reliably buy our wardrobe staples through their catalogs. They even pioneered certain categories like duffel bags and winter wear, offering high quality at just above discount prices.  Their stuff lasted forever.

Two of their staples for men were the basic men's polo shirt and khaki trousers.  Quality of the basic fabrics was high, and they always had nice details like collars that lay flat and buttons that didn't break. Founder Gary Comer began his business career in advertising copy writing, and I confess that the catalogs themselves were fun to read.  They continuously reinforced in story the company's corporate messages:

  • We provide wardrobe basics of the highest, department store quality, or better, at discount store prices, and we deliver to your door.
  • Lands End spends a lot of time with our suppliers and designers to make the basics better.  We pay attention to detail, e.g. rolled collar dress shirts as opposed to fused collars. 
  • If you're not satisfied, ship it back to us on our dime, no questions asked. And, this was actually true.
  • You can always talk to us on the phone, and we're farm folks in Wisconsin who love to talk to our customers.
The customer service folks were women working out of their homes to earn a little extra money, and they knew the catalogs, loved the company, and really enjoyed helping customers with sizing and color questions. All of the above is a concrete example of a company's value proposition written into a corporate culture, which people were proud to advertise themselves.  This was the Lands End brand.

Now, it is been totally debased, and we've written about this before.  The clothes are awful.  If possible, they are a step below the early, trashy Target private label line Merona, and even worse than Penney's Stafford private label line.  Perhaps a step below Wal-Mart would be the appropriate comparison.  The customer service folks are gone, and they're generic call center people who probably handle dozens of catalogers. 

I would never need to call about returns, because no one in their right mind would buy this merchandise in a Sears store.  They are laid out like dump tables in an Odd Lots store. 

So, when the spin out story is put together, it will be an empty shell.  The folks who now provide the comparable quality merchandise are L.L. Bean or Eddie Bauer, but they are significantly more expensive. Lands End could never recapture their niche from these two, and other, competitors, of which there are many niche catalogers, like Duluth Trading.

So, today's story is about Sears trying to "unlock value" from Lands End.  Good retailing companies are about a sustainable value proposition, execution and a strong culture.  Sears has sucked all of these out of the company that Gary Comer founded.  Hedge fund managers can't operate companies, so beware of one who is selling one he operates.

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