Lands’ End lays off 10% of corporate workforce (2024)

Dive Brief:

• Lands’ End Chief Financial Officer Bernie McCracken during the retailer’s fourth-quarter earnings callWednesday announced that the company “executed a high single-digit percent reduction in corporate headcount in January.” The job cuts, along with earlier changes in its sourcing organization, represent a total reduction of about 10% of corporate headcount.
• Fourth-quarter net revenue at Lands’ End fell nearly 3% year over year to $515 million from $530 million last year, the company said in an earnings announcement. The company posted a quarterly net loss of $8.6 million. Gross profit for Q4 was $195.4 million, a 13.5% increase from $172.1 million a year ago.
• Net revenue for the year was down 5.3% year over year to $1.47 billion versus $1.56 billion a year earlier. The company reported a net loss of $130.7 million from $12.5 million last year and a gross profit of $625.5 million, up 5.3%,from $593.8 million a year earlier.

Dive Insight:

The layoffs came as Lands' End faced growing losses and declining sales in the fourth quarter.

Lands’ End generates a significant amount of revenue through third parties.For the year ended Feb. 2, third-party net revenue was $111.8 million, a decrease of 6% from $119 million a year earlier. The company said that decline was largely driven by a drop in demand with one unidentified wholesale partner but partially offset by growth in online sales through other marketplaces.

Landsʼ End also sells via its website and company-owned stores. It also sells products through the Outfitters distribution channel, which sells uniforms and logo apparel to businesses, employees, schools and students.

Global e-commerce revenue for the year decreased 7.1% to $1 billion. Excluding Lands’ End Japan, which the company closed at the end of 2022, global e-commerce decreased 4.3%. E-commerce net revenue for the U.S. fell by 2.7%.

Its partnerships with retailers have been a bright spot for Lands’ End recently.Last year, the retailer credited Kohl’s marketplace for a Q4 sales boost.

The company said its exclusive swim offering in 200 Target stores is performing well and that it plans to add “a couple of elevated partners” to its roster in the future, CEO Andrew McLean said Wednesday. “There's one [partner] we're hoping to talk about in the next few months, and I think at the same time, it's about continuing to work with the partners we've got.”

McLean also said Lands’ End expects to begin receiving royalties this year from recent licensing agreements with club stores – primarily Costco – along with kids categories and footwear. The company is also looking at opportunities to grow the business at Target and Macy’s, McLean said.

Looking ahead, the company expects full-year net revenue to range between $1.33 billion and $1.45 billion, with net income ranging from $1 million to $10 million. Gross merchandise value is expected to deliver low- to mid-single-digit percentage growth.