In a surprising pairing, Lands’ End, a casual brand with an Americana appeal, has tapped Federica Marchionni, a European luxury executive who dresses to the nines, as its next chief executive officer.
The announcement Monday raised eyebrows across the industry, given Marchionni’s image and her experience. It’s her first ceo role, and a leap from her current job as president of Dolce & Gabbana USA. That business is estimated at between $100 million and $200 million in sales, whereas Lands’ End generates more than $1.5 billion in revenues.
Marchionni will succeed Edgar Huber as Lands’ End ceo on Feb. 17. Huber is expected to soon take a new job, in the retail and digital sector, possibly linked to a private equity firm. He was not available for comment.
Huber’s biggest accomplishment at Lands’ End was April’s spin-off of the brand from Sears Holdings Corp. into a freestanding public company listed on the Nasdaq exchange. Sears bought Lands’ End for $1.9 billion in 2002. Huber, a former Liz Claiborne Inc. executive who had headed the Juicy Couture brand after a career spent mostly in the beauty business, had been ceo of Lands’ End since 2011. He’s also credited with making digital growth at Lands’ End a priority, as well as elevating the quality of the collection; expanding the product range, including initiatives in swimwear and launching activewear, and adding financial disciplines.
In the fourth quarter, however, the company experienced some fashion misses, weakness in cold-weather products, and unfavorable currency exchange rates. Its steadily diminishing presence in Sears stores contributed to a revenue decline. The company expects earnings for the quarter ending Jan. 31 to decline to a range of $1.06 to $1.16 a diluted share, down from $1.44 in the prior year, and overall revenues to decline to between $505 million and $515 million from their year-ago levels of $530 million. The consensus estimate was for earnings of $1.38 a share on revenues of $542.2 million. The firm does expect improvement in its fourth-quarter gross margin — to between 43.8 percent and 44 percent from 43.7 percent in the 2013 period.
“The quarter was difficult but the year was not so bad,” said a financial source close to the company. “The two most difficult areas were currencies and the business at Sears.”
“With the successful completion of the spin-off of Lands’ End.…I have accomplished what I came to achieve at Lands’ End and I look forward to the company’s success in the future,” Huber said in a statement.
Sources noted that Huber had been thinking of leaving Lands’ End, which is headquartered in Dodgeville, Wisc., for some time to return to the East Coast, and that working under the Sears umbrella for about two-thirds of his tenure until the brand went public last spring was challenging for him. Lands’ End said he resigned.
Marchionni’s challenge will be to continue to improve the product and brand image, and further digital and international growth. Due to its presence at Sears stores, Lands’ End has long held back from rolling out its own stores, but could decide to in the future.
As president of Dolce & Gabbana USA, Marchionni was most involved in the wholesale distribution and retail sides of the business. “She’s very intelligent and represented Dolce & Gabbana very well,” said a retail source. “But it may be tough for her living in Wisconsin. It’s farm country. She also never had any engagement in this kind of casual product. She’s very Upper East Side, Italian, urbane, and she dresses formally.”
Josephine Linden, non-executive chairman of Lands’ End, described Marchionni as a “multitalented, visionary business leader with a complete set of creative, strategic and analytical skills to grow a multichannel apparel brand in a highly competitive and evolving global environment.” Increasingly, retail brands have been making out-of-the-box hires, partly to bring fresh perspectives, partly due to the industry’s lack of talent.
Lands’ End said while Marchionni was at Dolce & Gabbana USA, revenues increased significantly, and she oversaw several key openings — including the Fifth Avenue flagship and units in Toronto, Chicago, Aspen and Boston. Earlier, she was a global group director at Dolce & Gabbana, leading business development for business units in more than 100 countries. Marchionni was also senior vice president at the Ferrari division of Dolce & Gabbana. She joined the company in 2001. Earlier, she held product marketing and sales jobs at consumer technology and telecommunications companies such as Samsung, Phillips and Ericsson. She has a master’s degree in business administration and management from La Sapienza University of Rome and once taught a two-year course on brand expansion and extension at Marangoni Fashion School. Marchionni was not available for comment Monday.
Her appointment follows boardroom changes at Lands’ End late last year. Linden, a principal of Linden Global Strategies LLC, succeeded Elizabeth Darst Leykum as chairman. Leykum remains a director and became chair of the nominating and corporate governance committee. Edward Lampert, chairman and ceo of Sears, is neither a director nor officer of Lands’ End, but by virtue of his personal holdings and those through RBS Partners, an affiliate of Lampert’s ESL Investments, he’s its largest shareholder.