Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovic from Bloomberg Radio. Well, the apparel
Speaker 1: company lands End reported earnings last week and for the
Speaker 1: second quarter, revenue came in at three eight four point
Speaker 1: one million dollars. That was an increase from twenty three
Speaker 1: point one percent in the second quarter of fiscal twenty
Speaker 1: and an increase of twenty eight point eight percent from
Speaker 1: the second quarter of fiscal twenty nineteen. The company's CEO,
Speaker 1: Jerome Griffith, joins us now. He's joining us on the
Speaker 1: phone from Long Island, New York. Jerome, it's so great
Speaker 1: to have you on the show. How are you. I'm good,
Speaker 1: Thank you, Thanks a lot for having me. Yeah, thanks
Speaker 1: so much for joining us. Hey, I want to talk
Speaker 1: a little bit about the challenges that you see, especially
Speaker 1: when it comes to the supply chain and how you're
Speaker 1: thinking about manufacturing right now, give us the idea of
Speaker 1: the changes that you've had to make over the last
Speaker 1: eighteen months as you've weathered this pandemic. Well, even even
Speaker 1: prior to the pandemic, one of the things we wanted
Speaker 1: to do was to sort of spread the risk We
Speaker 1: have been producing about forty two our products out of
Speaker 1: China up going into we get to to expand that
Speaker 1: out into other countries so that we weren't really dependent
Speaker 1: so much on one country at all. What's happened to
Speaker 1: us over the course of the last let's a year
Speaker 1: to year and a half is that products getting into
Speaker 1: the States have started to slow down dramatically, and costs
Speaker 1: have really risen, not just costs on shipping, but costs
Speaker 1: on raw materials. So you see cotton costs and we
Speaker 1: do a lot of cotton um rising pretty significantly. But
Speaker 1: then you look at just the cost of shipping things
Speaker 1: from any country here. Whereas containers three years ago we're
Speaker 1: costing around four thousand dollars a container, the last six
Speaker 1: months they've been up in the twelve of the fifteen
Speaker 1: thousand dollar range, and I've heard quotes as high as
Speaker 1: twenty five thou dollars for a container. And the same
Speaker 1: things happened with air shipping, not not that we ship
Speaker 1: a lot by air, but but those costs have been
Speaker 1: going up as well. So you know, we will continue
Speaker 1: to look at expanding our network to make sure that
Speaker 1: we have a little bit more options than than just
Speaker 1: going to one, two or three different places in order
Speaker 1: to get get products made and shipped. Drowing such a
Speaker 1: pleasure to have you us. I love speaking to the
Speaker 1: retailers because you you have such a lens into what's
Speaker 1: going on in our US and global economy. You know,
Speaker 1: supply chain one thing. I want to talk a little
Speaker 1: bit about the labor market. You know how it lands
Speaker 1: end dealing with a pretty tight labor market. I mean,
Speaker 1: how are you staffing stores, facilities? You guys seem to
Speaker 1: be seeing some growth now in e commerce. What is
Speaker 1: the priority for hiring? Uh? Well, e commerce really runs
Speaker 1: out of our corporate office and that's of our business.
Speaker 1: So that's been running along relatively well, um for the
Speaker 1: last two years. Our core businesses are US direct e
Speaker 1: commerce business and then if you add on the international
Speaker 1: businesses and the B two B businesses which we do online. Uh,
Speaker 1: it creates you know, quite a large, large annual volume.
Speaker 1: What's happening with these businesses. And we've been able to
Speaker 1: hire people because you know, we're in aesting company and
Speaker 1: the company is also doing well, so you know that
Speaker 1: tends to attract people. Where we've where we struggle somewhat
Speaker 1: is just logistically how we ship goods out to customers.
Speaker 1: We are based in Wisconsin. We have three major facilities there,
Speaker 1: and we're a major employer in southern Wisconsin. What you've
Speaker 1: seen with the labor market as of the last six
Speaker 1: to nine months is people aren't working as much, so
Speaker 1: it's been very difficult to entice people. We've given two
Speaker 1: raises so far this year. We've put on peak um
Speaker 1: peak incentives for people to come into work, and we've
Speaker 1: had people working, you know, over time just to get
Speaker 1: the goods out the door. What we're we have just
Speaker 1: made it through our back to school peak, which actually
Speaker 1: worked out okay for us, and we'll be going into
Speaker 1: another hiring phase and it will be determined, you know,
Speaker 1: whether the people that have been getting unemployment and staying
Speaker 1: home are going to be ready to come back to
Speaker 1: work because an unemployment stops to day in most places.
Speaker 1: I think so, and I hope so. But I have
Speaker 1: learned in the last year that I don't know when
Speaker 1: you say you've had to raise wages twice, what are
Speaker 1: we talking about here? Where are they right now? Depends
Speaker 1: on your your average. We've raised raised them through between
Speaker 1: three and four percent in May and another percent and
Speaker 1: a half just this past month. Um, and obviously starting
Speaker 1: salaries are over fifteen bucks. So you know, we've been
Speaker 1: doing the right thing by the market. Uh. And the
Speaker 1: market really dictates, you know, what you need to do
Speaker 1: for the people who have been with you for a
Speaker 1: long time. Because we're a fifty eight year old company.
Speaker 1: You know, we've had we've had people that have worked
Speaker 1: for us for thirty five years and you know, very
Speaker 1: loyal employees, and you want to make sure that they're happy. Sure,
Speaker 1: I'm a brit acclimatizing to life in the United States,
Speaker 1: so I kind of asked this hesitantly, but should we
Speaker 1: talk about the holiday seasons approaching? Everyone keeps telling me
Speaker 1: fast approaching the holiday season? How's it looking from your perspective?
Speaker 1: I think the holiday season is going to be depended
Speaker 1: on getting goods here. Um. You know, this would be
Speaker 1: my forty three Christmas since I graduated college, and everyone
Speaker 1: gets just a little bit harder. But what we think,
Speaker 1: and you know, we've seen pretty good demand coming up
Speaker 1: until now. We haven't seen a huge slowdown in demand.
Speaker 1: We think demand is still going to be there and
Speaker 1: every year, you know, it ends up coming coming around
Speaker 1: because people always end up going out shopping for for Christmas.
Speaker 1: I think the people that are going to win, and
Speaker 1: this is our mentality, are the people that service the customer.
Speaker 1: If you're servicing the customer, you'll win. Yes, maybe your
Speaker 1: cost might be a bit higher, but as long as
Speaker 1: you can serve as a customer and keep them happy
Speaker 1: and keep them coming back, you'll continue to win as
Speaker 1: a brand. How early do you want consumers to order
Speaker 1: from you for the holiday season? You know, people start now, uh.
Speaker 1: And we saw it last year, and we saw it
Speaker 1: for back to school this year. You know, people started early,
Speaker 1: ordering early and back to school and they started ordering more. Uh.
Speaker 1: And my sense is the same thing is going to
Speaker 1: happen this year is that people will shop early and
Speaker 1: they'll want to buy more because they've had ten up
Speaker 1: demand and they have good savings right now, and people
Speaker 1: will want to spend. I think what's going on in
Speaker 1: the supply chain and what's going on with getting the
Speaker 1: goods from the manufacturers to the containers, the containers to
Speaker 1: the ports, trucking the containers from the ports to the warehouses,
Speaker 1: and then ultimately getting it out the consumer. That's gonna
Speaker 1: be the tricky part for this year. And I think,
Speaker 1: you know, the market knows that obviously. It was in
Speaker 1: the Wall Street Journal over the weekend, you know, and
Speaker 1: it was in w w D last week talking about,
Speaker 1: you know, what's going on in the industry. It's a
Speaker 1: big deal, and people are working very hard to make
Speaker 1: sure that they get Jerome Griffic. We're gonna have to
Speaker 1: leave it there. CEO of lands End joining us on
Speaker 1: the phone from Long Island, New York,