Lands’ End Embarking On CEO Search

Lands’ End (NASDAQ:LE) CEO Federica Marchionni has stepped down, effective immediately, and the company is now searching for a new CEO, according to a statement from the company. Josephine Linden, board chairman, said in a statement, “Federica is stepping down at this time, leaving Lands’ End well positioned to continue its evolution and capture the growth opportunities that exist for our iconic brand in this dynamic retail environment.” The new chief will be the third since Sears spun off the company in early 2014.

Marchionni became Lands’ End CEO early last year. Her employment agreement specified that she would not have to move to the small southwestern Wisconsin city of Dodgeville, where the company is headquartered, and that her primary workplace would be in New York. In each of the six quarters of Marchionni’s tenure, Lands’ End reported negative same-store sales. Last fiscal year, the company’s sales declined 8.7 percent. Annual sales have fallen for four consecutive years and net income for two.

Marchionni, a former Ferrari and Dolce & Gabbana executive wanted to take the brand upscale, but the effort proved futile. The brand is best known for kids’ uniforms and outdoor clothing. Lands’ End opened pop-up stores in trendy shopping areas, unveiled slick ad campaigns, and introduced slimmer-fitting clothes and a new line of athletic wear. However, the company was unable to attract a broader clientele beyond its catalog shoppers.

Lands’ End has been severely injured by its reliance on physical space at Sears, launching home goods in an already busy segment, and inventory overstocks after out-of-stocks deprived it of sales. Sears spun off the company as part of its efforts to generate cash amid a sales collapse. Sears has closed hundreds of stores in recent years. There are still Lands’ End shops at 224 Sears stores.

Lands’ End stumbled early this year with a marketing piece that profiled feminist icon Gloria Steinem on its website and in its spring catalog. The retailer, which sells a huge amount of uniforms to Catholic schools, quickly got pummeled by customers with pro-life views. Soon after, the company apologized for the ad, only to spark the anger of customers on the other side of the abortion debate. Customers flooded the company’s Facebook page with comments and at least two private religious schools stopped purchasing uniforms from the company.

Marchionni said in a statement, “The Board of Directors and I have agreed it is time for others to bring Lands’ End into the future.” Joseph Boitano, executive vice president and chief merchandising and design officer, and James Gooch, executive vice president and chief operating and financial officer, will take over as co-interim CEOs.

 

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