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When Edgar Huber, president and chief executive officer of Lands’ End, offers some of the brand’s own peppermint cookies to a guest, it’s not simply because he’s a warm and welcoming guy.
This story first appeared in the May 23, 2013 issue of WWD. Subscribe Today.
Sure, the sign on his door reads just “Edgar,” and it fits. “We’re very low key. There’s not much hierarchy here,” Huber said, referring to the sprawling, 175-acre Lands’ End campus, situated next to a feed mill in Wisconsin farm country.
But with the can of cookies he’s making a point: that Lands’ End can sell a lot more than just gingham shirts, monogrammed canvas totes and squall jackets, and that in the age of omni-retailing and 360-degree megabrands, the attitude at Lands’ End is not laid back.
“We absolutely have the capacity to achieve ‘image transfer,’” Huber stressed. “You know these cookies sell. We also sell millions of holiday stockings every year. I’m not sure Abercrombie & Fitch can do that.”
Huber joined Lands’ End in August 2011 after serving as executive vice president of global business development for Liz Claiborne Inc. and, prior to that, president and ceo of Juicy Couture. Earlier, he held senior posts at L’Oréal overseeing a portfolio of brands including Ralph Lauren Fragrances, Giorgio Armani Beauty, Diesel Fragrances, Lancôme, Shu Uemura and the Kiehl’s Since 1851 brand.
Cosmetics, he added, “is one of those categories customers would expect, especially body care and body washes. We are not there yet, but it might be an interesting development in the future. Victoria’s Secret in a very short time became a $1 billion beauty business.
“It’s a matter of commitment and brand perception.”
There’s also room for growth in accessories, home, kids’ and men’s wear, Huber said. And why not a travel agency under the Lands’ End banner? “It could focus on sailing trips,” reflecting the favorite pastime of Gary Comer, the late founder of Lands’ End.
At 50 years old, the $3 billion Lands’ End is pushing its boundaries with new strategies. While service, fair value, quality and classic styling remain the core of the business, “super segmentation,” “paper-to-digital’ and “image transferring” are increasingly part of the strategic dialogue at the Dodgeville, Wis.-based headquarters.
So is fashion.
According to Huber, Lands’ End is introducing fashion-driven items, and building upon the past season or two where Lands’ End starting stepping out with polka dots and pattern mixing — looks that would be considered bold by Lands’ End traditional standards. Painterly puffers are in the works, too.
“The more you go into fashion, the more you expose yourself to the risk of fashion misses,” Huber surmised. “We don’t think we will ever have a camouflage.” Yet on the other hand, “We are developing fashion in a way where there is a calculated risk. We will test more fashion-forward products.”
Huber also cited “a whole new menu” of fits for shirts, polos and pants under the Lands’ End Canvas label, and a wider range of fits across traditional, tailor and slim-fitting Lands’ End dress shirts, making for a total of 45 fit options in the shirts. Both are being introduced for fall.
Technology in product design is progressing, particularly with processes that help flatter the figure and contain it, or protect the body in some way, like “body mapping” linings providing shape control, and the recently launched “shape and enhance” swimsuit. Lands’ End also started selling rash guards, “iron knee” pants for boys, and swim Ts that block out ultraviolet rays of the sun.
With its familiar lighthouse logo, which was just updated, Lands’ End is breaking a company taboo. A limited collection of logo-ed polos, Oxford shirts, rash guards, luggage, outerwear and swim shorts is coming out for fall, though Huber assured the logo-ing is restrained.
“Jewelry, which launched in spring 2012, and accessories are a huge opportunity for this company,” said Derek Durley, senior vice president of retail, who was interviewed at the remodeled, 10,000-square-foot Lands’ End store just west of Madison, Wis., which has updated fixtures and fitting rooms, a Calder-style mobile, key item presentations, such as with sweaters and dresses, and, most refreshingly, modest signs that don’t scream price. “We’re priced to sell. We price it fairly. We don’t want to be a brand that’s overly promotional at all, not like Old Navy,” Durley said.
If there is any criticism of Lands’ End, it’s that it hasn’t evolved enough, and has been slow in extending its category reach. The company maintains an all-American, clean-cut classic image and has generally excelled the most in outerwear and swimwear.
“There are customer expectations for new products and services,” Huber acknowledged. “Naturally, there is a temptation to do better what we do already. Optimizing what we do is absolutely necessary. But it is also extremely important to transform because retail is rapidly changing.”
Putting to rest those perceptions the company is complacent, Huber explained the brand’s “super segmentation” strategy, whereby it “can tailor nearly each message for nearly every individual.” Then he said the “paper-to-digital” strategy is getting the team focused on driving digital demand. All customer acquisition now happens through digital, rather than via catalogues, he explained, and catalogue circulation is being reduced to cut paper, postage and transportation costs, and to take sustainability up a notch. Furthermore, catalogues are getting mailed on a more targeted, selected basis, as Lands’ End digs deeper into the data on what customers are buying and what their needs are.
Asked if the Lands’ End catalogue will always be around, Huber replied, “Yes, because there will always be people who prefer a catalogue and having it in their hands, flipping through it. For me, a catalogue is very equivalent to a store. My catalogues are my stores. There will always be a block of customers who want a catalogue. It’s really about achieving the perfect mix. We still have a very good response to the catalogue. It’s profitable.”
A few days ago, Huber returned from Hong Kong. “There are lots of opportunities to develop business into new markets and to develop partnerships in countries like Russia and China,” Huber said, such as joint ventures and licenses. In certain areas, Lands’ End would require hooking up with local operators of distribution centers to service Lands’ End online orders. South America is a possibility but not an immediate one, Huber added, requiring a different set of considerations for fabrics, styles and sizing.
At the heart of the catalogue is photography. At the company’s studio, housed in a former Wal-Mart that’s now part of the campus, Nate Pence, vice president of creative, gave his point of view on what drives the business: “Great photography. It’s at the core of the brand, whether it’s with models or stills.”
The studio has 12 photo sets and two photographers who jump from set to set shooting product. A separate facility is on campus for shooting models. Photography is also done on location, and lately, more shoots are by the seaside, with sailcloth and driftwood in the backdrop, to evoke Lands’ End nautical roots. Increasingly, models with their families are appearing in the creative. “Two models together look like they’re modeling. Families have a different dynamic. It’s more authentic,” said Pence. Asked if celebrities are ever used, Pence said it hasn’t happened. “Never say never, but it’s important to keep an element of real in the brand.”
Less glamorous though just as critical is the 1 million-square-foot distribution center on the campus. The center is connected to the executive offices through an underground tunnel.
“On Cyber Monday we get 212,000 orders, but the next day I always call Cyber Tuesday. That’s when you’ve got to get it out the door,” said Harry Schutte, vice president of global distribution and an industrial engineer, during a tour of the DC. “During December, we are shipping 50 UPS trailers a day, with 3,000 boxes in a trailer.” Spewing a litany of impressive statistics, Schutte said 30,000 items an hour are picked; 15 million packages are shipped each year, and 500,000 cartons, holding 20 items each, are stacked high in a 66-foot tall reserve building, which happens to be the tallest building in Iowa County. Among the unique aspects of the distribution center are the monogramming machines for totes and towel sets, a service Lands’ End is known for, and machines for cuffing and hemming pants (down to the quarter-inch), which is another special service.
Despite the miles of conveyor, and all the intricacies of storing, sorting, picking, packing, processing and loading the products, “we are 99.95 percent accurate,” boasted Schutte. “It’s a people-person business. I don’t think it will ever be totally automated.”
Over at the call center, Mary Judkins, senior manager of customer care centers, discusses service, one of the brand’s hallmarks. Customer care specialists undergo 72 hours of training upon being hired, and another 18 to 24 hours of training each year for product and technology updates. Specialists on average have 13 years on the job, but the ace in the hole is that the call centers are domestic, whereas many U.S. companies have outsourced their consumer communications.
“Customer care is a silo in most companies. Here it’s across the entire company. Most calls are answered within 30 seconds.” Judkins added that customer care specialists can be empowered to extend an offer that may have already expired, if a customer requests, and make suggestions on products that aren’t requested.
Anything can be returned anytime for any reason for a full refund, and that’s created some interesting return scenarios. For example, in the mid-Eighties, Lands’ End sold a London taxi cab as part of one of its over-the-top holiday gifts. When the owner wanted to return the cab 10 years later, Lands’ End didn’t refuse. The cab is parked in the distribution center.
More recently, there was a customer, one of Lands’ End’s best, who purchased about $100,000 of products over a four-year period. The customer decided to return about $14,000 worth of products, and Lands’ End said fine.
Officials say those are rare instances of customers taking the liberal return policy quite literally. “It’s a small percentage,” said Kelly Ritchie, senior vice president of employee and customer services. “Customers are not cleaning out their closets and returning stuff.”