Investors were keen to see former Tumi Holdings chief executive officer Jerome Griffith take the helm at Lands’ End, but a hint of doubt remained since the staid company’s last luxe leader took the brand too far up market.
Griffith will become ceo in March, succeeding Joseph Boitano and James Gooch, who have served as co-interim ceo’s since September, when former Dolce & Gabbana executive Federica Marchionni left the company after just 19 months. She was criticized after her efforts to bring out Lands’ End chicer side fell flat.
Traders were betting that mistake wouldn’t be repeated and sent shares of the company up as much as 6.4 percent before the stock closed at $17.75, up 3.8 percent.
Josephine Linden, chairman of Lands’ End, said the company is counting on Griffith’s “experience and tactical execution” to “improve financial performance and build sustainable long-term value for stockholders.”
“Jerome is an exceptionally gifted leader with an impressive track record of spearheading growth and expansion at several iconic apparel and consumer goods companies,” Linden said. “Over the course of his career, Jerome has demonstrated a special talent for innovation in design and functionality to attract new customers while upholding the quality, value, service and products that current customers love.”
Andrew Bove, a debt analyst at S&P Global Ratings, said Lands’ End “kind of veered away from traditionally what their merchandise strategy was, they got into more fashion-forward type of merchandise, which hasn’t resonated well with their core customer.”
The company has recently changed course and Bove said Griffith should continue to try to push the brand to a more mass audience.
“It’s too early to really tell what’s going to happen with this new ceo, it looks like he’s coming over from more higher-end companies, so that’s something that worries me a little bit,” he said.
Griffith was most recently ceo of Tumi Holdings and prior to that held executive positions at Esprit Holdings Ltd., Tommy Hilfiger, the J. Peterman Company and Gap Inc. Griffith is a member of the board of Vince, Tom Tailor SE, Samsonite and The New School’s Parsons School of Design.
On Friday, S&P cut its outlook on Lands’ End’s debt to negative from stable, noting the company’s “ineffective merchandising, disadvantageous retail store positioning [nearly all physical locations are within the struggling retailer Sears], and management’s lack of ability to leverage the company’s infrastructure and expertise in the direct-to-consumer channel have weakened the company’s competitive position, and will remain as key issues that weigh on company performance over the next 12 to 24 months.”
Sears bought Lands’ End in 2002 — before hedge fund honcho Edward Lampert combined Sears with Kmart and the two ailing concepts fell into what has been a steep decline in a shifting market place.
For the first nine months of the year, Lands’ End posted a loss of $15 million on a 7.3 percent drop in sales, to $876.9 million.
Upon Griffith’s arrival, Boitano will move to the roles of executive vice president and chief merchandising and design officer. And Gooch will transition to executive vice president and chief operating and financial officer and treasurer.