E-Commerce Gives Lands’ End a Boost

Catalog company Lands’ End (NYSE: LE), which sells apparel and gifts, reported disappointing, though encouraging earnings on Thursday. This is not a contradiction. Overall fourth-quarter earnings fell 38 percent (including charges) to $25.7 million (US$). But the mail-order company’s stock climbed more than 10 percent on Thursday, largely because e-commerce sales more than tripled last year, climbing from $18 million to $61 million. Shares of Lands’ End rose 3-1/4 to 34.

Lands’ End elaborated on its Internet strategy when earnings were released.

“The Internet has allowed us to attract new customers and better serve our existing customers by providing several options for consumers to interact with us,” president and CEO Dave Dyer said. “The company’s decision to embrace the Internet early on was logical considering that the majority of Lands’ End customers own a personal computer and are twice as likely to live in an online household than the average person.”

Lands’ End added that personalization and individualized service are keys to online sales.

A Boost from the Holidays

Lands’ End said online sales during the holidays were brisk, but the company did not give specifics. In preparation for the expected increase in traffic, Lands’ End added three servers. The company’s Web site was visited nearly 10,000 times an hour during the busiest shopping day.

Lands’ End’s Web site launched in 1995 with fewer than 100 products, and it now has more than 1,000 products. As the Web site continues to expand, the company plans to feature all of Lands’ End’s core catalog merchandise — and much of the company’s specialty catalog products — on its Web site.

Lands’ End is experiencing what many direct merchants are going through. The cost of printing and mailing catalogs are a major expense, and the Internet can help keep costs down.

“The Internet is a perfect fit for Lands’ End and the direct merchant business model we started in 1963,” Dyer said. “The added convenience and personalization features our site offers, makes it a compelling new way for customers to shop with us.”

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