Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. Well, not sure
Speaker 1: if you notice, but you probably should have shares of
Speaker 1: lands End. They are on a tear up more than
Speaker 1: this year. The retailer reporting earnings this morning and beating
Speaker 1: estimates from more on the quarter of the business and
Speaker 1: the outlook. Let's bring in lands End CEO Jerome Griffith.
Speaker 1: He joins us on the phone from Long Island, New York. Jerome,
Speaker 1: nice to have you here on Bloomberg. How are you good, Carol?
Speaker 1: How are you doing doing okay? Hanging in there after
Speaker 1: what's been, as you know, a crazy year. Tell us
Speaker 1: about the past year and the impact that the pandemic
Speaker 1: has had had on you and your team and on
Speaker 1: your business. Well, obviously about a year ago when we
Speaker 1: went into lockdown, it was real shock for everyone, and
Speaker 1: you know, we shut doors and and furlough folks and
Speaker 1: took salary reductions very quickly, and we're able to try
Speaker 1: and adapt to whatever the new normal was going to be.
Speaker 1: Our demand went down in March last year, but very
Speaker 1: quickly reb ounted in April and then went on a
Speaker 1: tear for the rest of the year. You've seen a
Speaker 1: lot more consumers shopping online, and uh, most of those
Speaker 1: consumers have been coming from Gen xers and baby boomers
Speaker 1: who have not been comfortable shopping online before, and since
Speaker 1: our business is an e commerce business, we've been the
Speaker 1: recipients of a big increase in demand and a big
Speaker 1: increase in new customers. We're just this past quarter report
Speaker 1: increase in new customer acquisition and retaining them over into actively.
Speaker 1: So yeah, we've we've been seeing some some really good
Speaker 1: numbers and I've got to say our troops have been
Speaker 1: extremely resilient. The folks that work in our facilities in
Speaker 1: Wisconsin have been just just great to work with and
Speaker 1: we've seen some really great performance there. Everybody's been working
Speaker 1: from home. We've been designing lines from home. We've been
Speaker 1: using three D design, we've been using architectural boards or
Speaker 1: designers can share ideas back and forth while working remotely.
Speaker 1: And what we've actually found is we've done a really
Speaker 1: good job. We've been extremely efficient. Um our folks are
Speaker 1: very happy working remotely, and as we get ready to
Speaker 1: return to the office in September, we're going to see
Speaker 1: a pretty liberal hybrid work environment where people are being
Speaker 1: just as creative, if not more creative, and coming up
Speaker 1: with great new ideas for us to continue to move
Speaker 1: the business forward. That is really fascinating because it's in
Speaker 1: contrast to really what we're seeing in the financial community,
Speaker 1: where there is it feels like a real big push
Speaker 1: to get everybody back to the office. Does it mean, though,
Speaker 1: to them that you guys might give up some real
Speaker 1: estate space because you just won't need it. No, we
Speaker 1: own all of our real estate in Wisconsin, so there's
Speaker 1: no sense to give anything up. What we might do
Speaker 1: is repurpose some of it. Uh, And we're thinking about that,
Speaker 1: but no, generally, Uh, we'll have people coming back into
Speaker 1: the office on on a hybrid schedule, and we may
Speaker 1: move people from one building to another to make it
Speaker 1: more efficient. But that would be about it. So when
Speaker 1: you talk about repurpose, does that mean you might rent
Speaker 1: it out to other folks? Um, we could. We haven't
Speaker 1: made it that far yet. We're still in the thinking
Speaker 1: stages right now. All right, So talk to me about
Speaker 1: retail trends. You said that you guys had a lot
Speaker 1: of new customers actually come on. What were people buying
Speaker 1: during the pandemic, and what about those trends if they
Speaker 1: were different from pre pandemic levels. Do you think stays
Speaker 1: with us? Going into the pandemic, we had already had
Speaker 1: a tagline for marketing purposes that said, let's get comfy.
Speaker 1: The most important thing to our consumer is comfort and
Speaker 1: fit and fabric. And while that was performing extremely well
Speaker 1: going into the pandemic, as we went through the pandemic,
Speaker 1: the the requests were Knitwear Lounge, where Sleepware, Home Bedding,
Speaker 1: Bathhouse really went through the roof. I would say the
Speaker 1: only thing that was more of an anomaly for us
Speaker 1: was the quick increase in home. But generally people come
Speaker 1: to us for comfortable clothing. We are known as a
Speaker 1: very casual brand, and we've seen the demand not only
Speaker 1: continue to increase through the pandemic, but as we're coming
Speaker 1: out of it, it continues to stay very strong. We
Speaker 1: think that as people return to the office, you know,
Speaker 1: the newfound comfort world, they're not gonna want to give
Speaker 1: it up. We found that our employees don't want to
Speaker 1: give up the freedom that they have and they don't
Speaker 1: want to give up the comfort, and this is what
Speaker 1: we're hearing from from our customers. As well. Yeah, that's
Speaker 1: kind of interesting. UM, but I agree, I see it
Speaker 1: even in colleagues who come back. I mean, I walk
Speaker 1: into para genes. I don't know that I used to
Speaker 1: do that, even if I change at work into kind
Speaker 1: of on air clothes. It's just our mindset has changed,
Speaker 1: and I think about what I really need. Uh. What
Speaker 1: about the supply chain? How did that work throughout the pandemic,
Speaker 1: or how has what happened during the pandemic maybe changed
Speaker 1: how you want to do it going forward. Well, I
Speaker 1: think from our manufacturer standpoint, they've done an amazingly good job.
Speaker 1: People have have pivoted very quickly with either gearing up
Speaker 1: or gearing down production. And some of them had a
Speaker 1: hard time with with COVID. Some people had to close
Speaker 1: their plants because of heavy COVID cases. But generally they've
Speaker 1: been able to manage it relatively well. Where we've seen
Speaker 1: problems is really getting goods into the country. The pork
Speaker 1: congestion has just been really terrible on the West coast,
Speaker 1: and that tends to add literally weeks to the supply chain.
Speaker 1: In addition to that, you've seen increases in pricing uh
Speaker 1: coming into the US, and then from your hubs getting
Speaker 1: deliveries to consumers. That's also been been increasing in price.
Speaker 1: And probably the scariest thing that's that's been happening is
Speaker 1: a lack of labor market. Um. People are happy to
Speaker 1: stay home and collect unemployment versus going out and getting
Speaker 1: a job in a pretty hot economy. Let me get
Speaker 1: back to lands En CEO Jerome Griffith, still with us
Speaker 1: on the phone from Long Island. The company reporting earnings
Speaker 1: earlier today, beating estimates, raising uh, their outlook for the
Speaker 1: next fiscal year, and uh, just talking about the business
Speaker 1: in killer. The stock has been on quite a run,
Speaker 1: up thirty seven in the past nine days. Hey, Jeroan,
Speaker 1: one thing I did want to ask you and Charlie
Speaker 1: Pellett just talked about a m C. We have been
Speaker 1: all obsessed a little bit with these meme stocks that
Speaker 1: have been on a tear. Your stock has had quite
Speaker 1: a run in the last nine days. As I said,
Speaker 1: almost up about fort here. I was reading some things
Speaker 1: that some are speculating that Land's End stock is getting
Speaker 1: caught up in the meme stock trading. What do you
Speaker 1: say to that? Because the stock was up sevent yesterday
Speaker 1: before earnings and it was hard to make sense of why. Um,
Speaker 1: what are your thoughts on this? And I'm curious if
Speaker 1: you're getting questions about this. We have a smaller float,
Speaker 1: so you'll see when it comes to announcement times around
Speaker 1: the quarters, you'll see some pretty volatile swings in and
Speaker 1: out of the announcement date. But generally, no, I wouldn't
Speaker 1: think that we're a meme stock at this point in time. Okay,
Speaker 1: So not worried about getting caught up in the craziness
Speaker 1: of it. I'm not worried about it now. Okay, So
Speaker 1: let's talk a little bit more about the business because
Speaker 1: there's a lot of stuff that it's interesting going on.
Speaker 1: First of all, one thing I want to ask you. You
Speaker 1: You mentioned uniforms before. That's a big business. I bought
Speaker 1: uniforms for you for my daughter, uh for school. Um,
Speaker 1: I'm assuming that business did it stop completely or fall
Speaker 1: off a lot in the past year, and it fell
Speaker 1: off pretty pretty far. A couple of parts of the
Speaker 1: business were tough. Obviously, the school part of the business
Speaker 1: was very difficult. And then in our national accounts, we
Speaker 1: have an inordinately large relationship with the travel industry, so
Speaker 1: we do Davis rented cars, Hampton Ins, Delta Airlines, American
Speaker 1: Airlines and and that was challenge. But what we've seen
Speaker 1: coming into the back part of is a much faster
Speaker 1: than expected recovery. Uh. The area that's still challenged in
Speaker 1: the uniform business is really the small medium sized businesses
Speaker 1: and that's going to be dependent upon the economy as
Speaker 1: we run through to come back. But is it getting
Speaker 1: back to or close to pre pandemic levels from what
Speaker 1: you're seeing accounts, Yeah, yeah, it is. We think that
Speaker 1: the schools and this will be back to pretty much
Speaker 1: normal by by this year, and then the national account
Speaker 1: business depending on the back part of the year. But
Speaker 1: we see that going much faster than what we had anticipated.
Speaker 1: So talk to me about this third party marketplace for
Speaker 1: sellers um interesting and is this a way go ahead.
Speaker 1: We brought the technology in last year and formally launched
Speaker 1: the marketplace in the fourth quarter of It performed very
Speaker 1: well for us over the holiday season, and what we've
Speaker 1: done has gone out to many other brands in areas
Speaker 1: that produced product that we really don't make. So we're
Speaker 1: looking at additional home products like furniture and home whears,
Speaker 1: things like that, additional shoes, and then accessories, jewelry, scent,
Speaker 1: beauty and bring margin. That's higher margin business. Right. Well,
Speaker 1: it's a good margin business for us. And what's great,
Speaker 1: it's a low risk because we take the information put
Speaker 1: it all up on our website, but then manufacturers are
Speaker 1: dropping drop shipping for us going directly to the consumers.
Speaker 1: So it gives the consumer when they come onto our
Speaker 1: website a much broader range of products the shop that
Speaker 1: they're looking for, and it's really de risking it for us. Jerome,
Speaker 1: how big a business could that be for you, guys,
Speaker 1: especially if you don't have the overhead of the distribution
Speaker 1: like Amazon does. How big of a business could it
Speaker 1: ultimately be for you? It could be tens to hundreds
Speaker 1: of millions. But we're still in the in the point
Speaker 1: right now where we're sizing it. We're bringing on many
Speaker 1: more brands as we speak. We expect to be well
Speaker 1: over sixty brands by the time that we get to
Speaker 1: holiday this year, and continuing to grow that and scale
Speaker 1: it over the course of the next few years. Hey,
Speaker 1: one last thing, partnerships Draper James reads Witherspoon. How important
Speaker 1: is that to um kind of you know, keeping the
Speaker 1: brand relevant if you will. Just great for the buzz,
Speaker 1: and what better than that is it's been great for
Speaker 1: the bottom line. We've been really pleased with the results
Speaker 1: that we saw last year and then again this spring.
Speaker 1: In fact, we're expanding our partnership with them in the
Speaker 1: back part of the year with the home furnishings and sleepwear. Yeah,
Speaker 1: and we've got some other exciting news coming down the pike,
Speaker 1: which we'll be able to talk about in the quarter
Speaker 1: or two. So we're working on some other fun stuff. Well,
Speaker 1: promise me you'll come back, because I'd love you. Guys
Speaker 1: have your hands with so many different things and it's
Speaker 1: just a great snapshot of what's going on. So I
Speaker 1: hope you'll come back and talk to us about that news. Okay, Hey,
Speaker 1: be well, I really appreciate it. Jerome Griffith, he's the
Speaker 1: land End CEO, joining us on the phone from Long Island.
Speaker 1: As I mentioned, uh, the company has really been making
Speaker 1: some changes. I talked about this third party marketplace that
Speaker 1: they are putting out. They talked about that earlier this year.
Speaker 1: In the stock as I mentioned, up almost in the
Speaker 1: past nine days alone, up about forty percent so far
Speaker 1: this year,