Lands’ End Case Study

Shawan M. Fisher, MPA
Management Information Systems
Texas Southern University
Fall 2015
September 30, 2015

Discussion of Company In 1963, Gary Comer, an advertising copywriter with Young & Rubicam, decided to pursue his dream of opening his own business. With $30,000 of initial funding, Comer and his partners Robert Halperin, Richard Stearns and 2 of Stearns employees set out to open Lands’ End. The first store was located in Chicago IL. and initially offered sailing equipment. Comer was an avid sailor along with Richard Stearns who was also a sailor. The next year, Comer produced a mail order catalog entitled “The Racing Sailors Equipment Guide”, and began filling orders that came in to the company. In the spring of 1977, Lands End produced its first catalog containing apparel and other goods. That same year, sales reached $3.6 million. In 1978, the company introduced its first button-down Oxford shirt upon which the Lands’ End legacy would be built. Also in 1978, operations were moved from Chicago to Dodgeville, WI.
Another significant shift in operations at the time was the introduction of fulfilling customers’ orders by telephone. Lands’ End set up its toll free 800- number ad staffed it with eager operators who were answering customers’ calls in less than 2-rings! With clothing offerings soaring, the company broke ground on an office building and a 33,000 square-foot warehouse in 1979. By 1980, Lands’ End moved into its new space with phone ordering shifting to 24 hour operation. Throughout the 1980’s, with several physical expansions, clothing and soft goods offerings, and store openings, annual sales and profits saw a gain of 40%.
Key Players In 1963, Gary Comer along with his 2 partners and 2 employees started a company whose initial offering was sailing goods with a few soft goods. Growing to hundreds and then thousands of employees, Lands’ End saw profits soar with the increase in apparel offerings especially the custom order items. The production of a dedicated toll free phone order line and catalog production led to further growth with the newly minted online catalog and ordering ability beloved by loyal consumers.
With the PC ordering ability and customized ordering, information technology had to be able to keep up with consumer demand. Computerization was on the rise in business and personal use with the internet becoming increasingly used by many. Comer and his partners brought in Archetype Solutions, Inc (ASI) to help facilitate and maintain functionality of the website’s ordering and supply chain. Founded by Robert Holloway and Jeff Luhnow, ASI was charged with making the consumer happy by providing an easy to use interface for customized ordering. On the business side, ASI was responsible with providing Lands’ End with the ability to track orders, provide clothing patterns for custom chinos and jeans, and enter into agreements with retailers and individual manufacturers to license manufacturing and tracking software.
Another major player in the company was Bill Bass, Senior Vice President for e-commerce and Lands’ End. Joining the company in 1999, Bass saw Lands’ End as having success in its e-commerce offerings by way of proprietary products, a strong distribution infrastructure, and brand establishment. Bass viewed the custom tailoring program as: “…one of the most significant technology advances in the apparel industry…[that] allows the masses to get the perfect fit without hiring a tailor…no [apparel company] can afford not to use it” [Swartz, 2002]
Lands’ End, according to Bass was in the position of catapulting to success by using technology as its springboard.
Key Issues
The internet was quickly becoming the business worlds’ tool for marketing and other information. Lands’ End introduced the world not only to web-based marketing and advertising, but it introduced something that would give them an advantage on the competition. Custom tailored ordering was soaring and supply steadily rising. Seeing the success in their bold move, partnering with the right companies was vital to the supply chain. Information systems had to be able to handle multiple stages in the process effectively and efficiently so that the end users would have what is needed to make the operation work seamlessly. The framework had to be as strong as the interface. Integration had to “sound” like a well tuned orchestra. Land’s End chose a company that had the promise and leadership to create the infrastructure of its web-based platform.

Before the web came to full circle, Lands’ End was steady in its production of catalogs, the success of phone and mail orders, and wanted just as much success with internet ordering. By choosing a firm that could handle the demands and supply chain, Lands’ End would lead the market in providing customers with a new tool in which to make purchases independently but with the support of the dedicated phone service to help should the need arise.

Archetype would be the strength behind the force. ASI was a small company that owned several patents pertinent to the algorithms to create and produce customized apparel. The founders had previous experience and a foresight into the realm of customized ordering. Another of ASI’s founders was experienced in marketing and engineering. Together they would take Lands’ End to the top and maintain its position for years to come. By having first mover advantage, Lands’ End would hold the advantage through many years to come.

After years of posting steady growth and skyrocketing profits and revenue, Lands’ End made the decision to sell to Sears. This decision would allow management of the brand to remain with them but allowed Sears exclusive right to carry the line in their retail stores. As time went by, Sears was able to increase stores who carried the brand as well as on its website and specialty catalogue. With the selling price over $1 billion, and continued control of operations, Land’s End made a wise decision by selling to Sears Holdings when they did.
Key Take-Aways
Take-Away 1- Companies must create and maintain a strong digital infrastructure to sustain its web based presence. A company’s website must have an intellectual presence for the end user making it feel like being in the physical location of the department or specialty store. The infrastructure must be maintained, refreshed when needed, expanded when necessary, and play gracious host to its dedicated and loyal consumers.
Take-Away 2- Ease of use of the interface for both the end user and its support staff. The end user can make or break a company’s digital interface. If the consumer cannot easily navigate a website, it feels crowded, or it’s not welcoming, the consumer can choose not to have a relationship with the company. As a consumer of internet shopping, I have garnered the power to select where I choose to make purchases. Making it easier for me allows me to relax while I shop as well as relax my wallet and let the spending flow freely. If I am awake at 2 am browsing Amazon for bathroom fixtures, having ease of use allows me to remember that my credit card information is on file and I can order from my smartphone without leaving the comforts of my bed! Sometimes infrastructures are too user friendly!
Take-Away 3- An infrastructure is only as strong as the foundation it’s built upon. The company must be able to rely on its infrastructure by making sure it is built strong and maintained regularly. It must also be able to change or modify the infrastructure based on consumer habits and market shifts. This will allow the company to structure and maintain its digital footprint and create profits and revenue by keeping a strong presence for consumer and support end users.
Take-Away 4- The interface must be maintained and changed to continue to attract loyal and new consumers as well as remain competitive in the market. Creating an inviting personal space digitally is something businesses cannot afford to neglect. The interface is like the inviting yet non-pushy sales person. It should leave the consumer felling that they can browse freely without interruption but has the ability to step in and help when needed. Features like live chat or 24 hour help line makes the consumer feel empowered and comfortable; key for digital success.
Epilogue
After the invention of the personal computer and the internet, the world focused on becoming digital. All of our analog ways were being diverted to this wonder called “digital” giving users the abilities that were never seen before. The 1980s welcomed the rise in purchasing personal computers for business, home and school use. It was at the end of that decade, in 1989, that Tim Berners-Lee invented the World Wide Web. The 1990s welcomed a burgeoning digital world. Everyone in every corner of the world was growing their digital infrastructure and platforms. By the 2000s, the digital footprint had spread worldwide.
It was during these formidable years, Lands’ End was growing with the changes of the technologically advancing world. This company was one that managed to stay ahead of its competition by being flexible and being first to use whatever technology that came available. Prior to the sale to Sears Holdings, Lands’ End set the stage to what would become the mold that everyone else in business would follow. Revenues and profits had exceeded $1 billion and Lands’ End was at a peek in 2002. So they did what many others have done but with more success. Gary Comer’s decision to sell his majority shares to Sears was a bold move. Sears would be just as bold with the purchase paying $11 more per share than was traded the previous day. Why would these two giants come together for what was seen by some as a terrible mistake? Land’s End was still climbing in the apparel market and Sears was top in its market for appliances. The “Deal of the Century” as coined by Catalog Age, brought these two industry leaders together for what would become a successful merger.
Sears Holdings would see success in offering the Land’s End brand for many years to come. As technology grew, so did consumer spending. By late 2005, the population of internet and cellular phone usage increased and by the end of the decade reached 1 billion and 3 billion respectively. Widespread interconnectivity of mobile networking devices, social media, and, of course, the internet saw an increase in the years 2010 and beyond. It was predicted that by the year 2015, that tablet and smartphone use would exceed PC use in internet usage. A fact I find true.
Consumers who favored using the internet gave businesses like Sears and Lands’ End the ability to mass produce custom apparel and attract new and keep a loyal customer base. This would continue until the “Deal of the Century” would produce a quiet divorce with Sears returning its rights to sell Lands’ End apparel. Lands’ End would regain its shares from Sears in 2013.
Integration
Integration 1: Royal Caribbean Cruise Line (RCCL)
Cruise travel is a luxury. Choosing a fabulous ship with an equally indulgent itinerary is the best way to travel in my humble opinion. Being an avid cruiser post-9/11 has given me a deep appreciation for a relaxed vacation. I can book online, schedule shore excursions, choose my stateroom, and make changes if necessary. I also have the ability to speak to a cruise advisor by phone. Over the years, RCCL recognized the need to integrate technology into both the land based operations and the ship based operations. A better infrastructure and interface was needed in order to gain more customers and increase loyalty of its existing customer base. In the past, cruisers booked through the ever present travel agent. This was usually a face-to-face meeting or phone call. The travel agent used the computer to book the cruise package. Cruisers had to wait until they were onboard to book shore excursions that were often oversold or even unavailable by the time cruisers reached port. On the supply chain side, staff aboard the ship relied on the ports to be able to do repairs on the ship if necessary, order needed supplies and food and beverages. These two things needed to work but often times had breakdowns in the process. What RCCL did was integrate their entire operations to connect to one another through a single, strongly built infrastructure. This will allow all users to connect to the places that were needed. Guest were able to book online leaving the travel agent and call center salesperson behind. The ability to book shore excursions without over selling and cancellations improved customer satisfaction and cruise staff appreciated that change. Also the supply chain was made stronger by the integration of IT. Similarly to Lands’ End, incorporating IT and building a strong infrastructure and user friendly interface, sales and profits rose rapidly and gave RCCL a leading edge in the cruise industry.
Integration 2: Encyclopedia Britannica
Like Land’s End, Encyclopedia Britannica was at the forefront of its market. Britannica boasted sales of epic proportions. Its sales force was one of face-to-face sales men targeting a certain population. The encyclopedia was sold to the middle class who were families with school aged children and taunted to increase the knowledge and future of the children of the household. During this time, neither the home computer nor the internet was being widely used. In the beginning of the computer era, only a small percent of homes had a computer. Also in this time, Microsoft was a grassroots start-up company offering EB a chance to make the generously sized volume of books into a smaller, easier to use digital platform. Although door-to-door was highly profitable, information technology was on the horizon. What makes this case similar to Lands’ End is that during this time, both businesses were thriving and posting huge profits after humble beginnings. What sets them apart is that they chose different approaches in embracing the technology that was growing by leaps and bounds. EB chose not to digitize and believed that the old way of doing business worked best. IT was so new that many did not initially approach it. EB chose to play it safe and travel the analogue avenue while Lands’ End chose digital drive. The end results saw the difference in embracing a new technology and thinking that it won’t work and end up being a costly failure. If I were management at EB, I would have made an investment into the future technology. I would not have put a lot of eggs in the basket, but spared a few to embrace a new technology.
Integration 3: Peachtree Healthcare
The healthcare industry should run like a healthy metabolism. A healthy body must function from head to toe or rather cells to muscles, nerves, and bones. On the cellular level, each cell must be able to do its job. Nerves must send the signal to bones and muscles in order for the body to move fluidly about. It’s called balance. Peachtree’s hospitals were cells that functioned independently. Acquiring new facilities were the bones and muscles of the operations. What Peachtree needed was a nerve center that was integral to movement if you will. The nerve center being integrated information systems. Unlike Lands’ End, Peachtree did not build a strong infrastructure. It played the EB card by letting the need sit idle while you wait on results. One day the need was visualized firsthand by a member of upper management who saw a flawed system in dire need of resusssitation. Upon seeing this, management began the process of selecting a vendor to bring Peachtree into the integrated information age. It was not an easy a task as it was for Lands’ End, but a very necessary part of the future of the health network.
Integration 4: Versona
Versona is my favorite boutique store. The offerings of a huge selection of affordable accessories paired with unique apparel offerings makes this store a bright spot of my shopping experience. I discovered that, to my dismay, that there was no way to shop on their website! The website provided visitors with a few pictures of models in the apparel and accessories. This was a huge flaw to their company, so I thought. The website was simply a brochure. To my surprise, in 2014 or 2015, Versona stepped into technology’s shoes and created a shopping trail. I was able to not only receive e-mail letting me know of sales and new merchandise, I could take my digital shopping cart on a spin around the virtual store. Versona was like and unlike Lands’ End. It is a profitable business and growing in locations across the country. What it didn’t have was a web based store which consumers like me could browse and shop. Its reach was small and only to those within reach of a physical location. Building a strong infrastructure is important in a website’s success. Versona recognized this by putting up the website to collect data on the number of hits that it received. If it was significant, it would be able to offer its goods for sale on the website. As a consumer, I am happiest when a website is easy, functional, and bright. Versona now has a loyal in-store and website customer who is always excitedly happy shopping either way.

Supporting Materials I. Lands’ End History 1963- 2002

Lands' End History

|1963 |Former advertising copywriter and avid sailor Gary C. Comer founds Lands' End, Inc. in Chicago, Ill. The company sells |
| |sailboat hardware and equipment by catalog. |
|1975 |Lands' End launches its first full-color catalog featuring 30 pages of sailing gear and two pages of clothing. |
|1977 |Lands' End moves focus toward clothing as 13 of 40 catalog pages feature clothes. Lands' End introduces Square Rigger® |
| |soft luggage. |
|1978 |Lands' End moves its warehouse and phone operations to Dodgeville, Wis., a rural community located 45 miles west of |
| |Madison, Wis. The company launches its toll-free 800 number and sells its first button down oxford shirt. |
|1980 |Lands' End expands the toll-free phone service to 24 hours a day. The first Lands' End outlet store opens in Chicago. |
|1986 |Lands' End goes public. |
|1990 |Lands' End launches its Kids' and Home catalogs. |
|1991 |Lands' End opens operations in the United Kingdom. |
|1993 |Lands' End opens a warehouse and phone center in the United Kingdom. Lands' End Business Outfitters launches. |
|1994 |Lands' End opens operations in Japan. |
|1995 |Landsend.com debuts on the Internet. |
|1996 |Lands' End introduces classics for men in big and tall sizes. Lands' End establishes operations in Germany. The first |
| |Lands' End Inlet store opens in Richfield, Minn. |
|1997 |Lands' End mails its first Kids' School Uniform catalog. |
|1998 |Landsend.com introduces Your Personal Model™, a tool that allows customers to build 3-D models of themselves. |
|1999 |Lands' End Live™ debuts online. Lands' End Home introduces furniture. Lands' End extends its Internet presence globally |
| |by launching e-commerce sites in the UK, Germany and Japan. |
|2001 |Landsend.com introduces Lands' End Custom™, an interactive tool that enables customers to create their very own custom |
| |pairs of pants in the comfort of their own homes. |
|2002 |Lands' End becomes a wholly owned subsidiary of Sears. Lands' End introduces "best sellers" into select Sears full-line |
| |stores. Lands' End introduces the Women’s Plus line, devoted to women's sizes 1X-3X and 18W-26W. |

II. The Logic behind Lands’ End Sale to Sears A. The experts speak At the time of the merger, many experts and analysts were weighing in on the decision Lands’ End made to sell to Sears. Everything from the timing of the move to the price was discussed. It was labeled as an excellent move by both companies. Here are some of what was said about the deal of the century:

"The presence of Lands' End apparel in Sears' full-line stores is expected to give Sears the strong brand-name recognition in apparel that they currently have in hardlines [such as] Diehard, Craftsman [and] Kenmore," said Daniel Barry, an analyst at Merrill Lynch, which handled Sears' latest public securities sale.

"We're acquiring a great brand, [and] introducing it into our stores will attract new shoppers...who will connect with our apparel departments better than they would have in the past," Sears CEO Alan Lacy told Street Sweep.

The New York Times weighed in on the merger by publishing an article appropriately entitled “Sears to Buy Lands' End In a Deal That Unites Pants and Power Drills”

The article went on to highlight the fact that this would be the first time Lands’ End apparel would be sold through another company. Sears also expected the sale of a brand exclusive to Sears would help boost sales of softline items using its existing customer base as the catalyst. Loyal customers would find other items and new customers had the ability to purchase a great brand. At the time, Sears was struggling in its ability to keep up with other retailers selling apparel. At one time, Sears also had a thriving mail order catalog. Closing that division nine years prior to purchasing Lands’ End was eye raising for some in the business world. The deal was one that would not change Lands’ End Company as the daily management was still with them. It was a vehicle for growth and an added brand and product for retail giant Sears.

References
Building competitive advantage through information systems: The organizational information quotient. (n.d.). Retrieved October 1, 2015.
Carpenter, D. (2002, May 14). Clothing Change: Sears buys Lands 'End for $1.9 Billion. Retrieved September 26, 2015.
Hays, C. (2002, May 13). Sears to Buy Lands' End In a Deal That Unites Pants and Power Drills. Retrieved October 1, 2015.
Lands' End. (n.d.). Retrieved September 28, 2015.
Lands' End, Incorporated - Annual Report. (n.d.). Retrieved September 20, 2015.
Reference for Business. (n.d.). Retrieved October 1, 2015.
Sears Annual Report 2002. (n.d.). Retrieved September 27, 2015.
Sears to acquire Lands' End for $1.9B in cash. (n.d.). Retrieved October 1, 2015.