In this video, theMarket Foolerycastreads the tea leaves for apparel companyLands' End (NASDAQ: LE). The new CEO -- Jerome Griffith -- is saying all the right things about focusing the company's efforts on e-commerce, but he has a long road ahead of him after his predecessor failed in her disastrous attempt to convert Lands' End into an upscale brand.
A full transcript follows the video.
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This video was recorded on March 21, 2017.
Chris Hill:Lands' End wrapped up theirfiscal year with their fourth quarter results. The results seem fine,but that's all they seem. They have a new CEO, a guy by the name of Jerome Griffith.I don't know too much about Jerome Griffith,except some of the comments that he was making, forward-looking in terms of what his priorities are as CEO. It seems like No. 1 on his list is looking at what Lands' End is doing in e-commerce and really expanding on that, reallydoing that in a much better way than they'redoing right now. I think anyone who's a shareholder of Lands' Endprobably applauds that, becausethis is a stock that's kind of going nowhere fast.
Bill Barker: It went down into the basement fast. As I've talked about before,I think one of the keys to life is to have an easy act to follow. The new CEO does, because, wow.
Hill: [laughs] Well done, Jerome.
Barker: Federica Marchionni who wasgiven the heave-ho backtoward the end of last year, and had tried to refashion Lands' End as a moreupscale fashionable thing with higher price points andmore stiletto shoes and things you don't associate with the brand. If you go to Lands' End's site today, you'll see they'restill trying to get rid of the women's shoesthat she had, the heel shoes, two-thirds off. Good time to go shop at landsend.com if what you need is high heels,because they're getting out of that. They'regoing to get back to basics. And I think that's going to help, and has helped already with the perception that there's a brighter future ahead than thestruggles that they hadtrying toget people to think of them as a completely different kind of store than their customers wanted.
Hill: I'm not saying that CEOsin any industry should not try to innovate, should not try and aim higher than whatever results that they're putting up. Any industry. I'm not saying that. But I do find it odd when apparel CEOs decide that what'sreally going to move the needle for their business, and therefore for their shareholders, is todivert pretty significantly from what they've been doing. I mean, I've always thought of Lands' End as good,tried-and-true, basic clothingin a wide variety, for kids, for women, for men. So, the notion that that's what she had laid out as the blueprint, that this is what's going to do it, it's like,you don't need to do that. Justexecute in a profitable way. That's all you need to do. Keepcranking out good clothes in a profitable way.
Barker: Shehad been atDolce & GabbanaandFerrariprior to Lands' End, and I blame the board,because I think she came in with a plan, and they knew what her background was, where her successes were, andI assume that the dialogue between them was, she was saying --
Hill: "Here'swhat I'll do if you hire me."
Barker: Yeah. "I thinkthere's something more fashion-forward than what you guys are doing, and that's where your future lies, and that's my expertise." Andthey hired her and took a shot at it, andit was kind of a disaster from the beginning,and she didn't move to company headquarters, she stayed in New York and flew in for a day or two a week, maybe, something like that, so there were culture issues. I thinkit was destined to fail, and if anything good can be said of it, it's that they got out of it quickly.
Hill: Well,good luck, Jerome Griffith.
Barker: So,now, they have a new start, and they have somebody whose background is inTumi Holdings, which was, he sold it off,Samsonite bought it.
Hill: The luggage company?
Barker: Yeah. More upscale than Samsonite. But, he's worked atTommy Hilfiger andGap as well in his past life. So,he has more of a background that one would considerappropriate for your vision of Lands' End.
Bill Barker has no position in any stocks mentioned. Chris Hill has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.