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player ready...Lands’ End Inc. was hardly announcing good news this week. The Dodgeville, Wis.-based catalog company said its 1998 earnings were off 51 percent, to $31.2 million from $64.2 million in 1997.
So why did its stock soar $3.75 a share to $34.50 after earnings were released Thursday?
Because, for the first time ever, Lands’ End told investors how much of its preppie sportswear was selling on the Internet–$61 million in 1998 to be exact. That may not be much for a company with $1.37 billion in annual sales, but it was triple the $18 million sold over the Web the year before.
Lands’ End’s new chief executive, David Dyer, wasted no time in accentuating the positive.
“Going forward, I believe our strengths as a premier direct merchant will enable us to position Lands’ End as a major e-commerce player. Within three or four years, I would like to see a significant part of our sales coming via the Internet,” he said.
That’s a reasonable goal for a catalog company with the infrastructure in place to fill and distribute orders all over the country.
But if Dyer wants Lands’ End’s shares to perform like a high-flying Internet stock over the long term, we’ve got an idea. Change the company’s name to LandsEnd.com.
Service with a smile: Executives at every U.S. retailer will tell you how important customer service is these days. Shoppers are more demanding than ever, and they’re always in a hurry. That doesn’t give a store much time to make a good impression.
Despite the lip service, service in America is actually declining, says Leonard L. Berry, head of the Center for Retailing Studies at Texas A&M University and author of the recently published book, “Discovering the Soul of Service.”
If Berry were handing out grades, he would give customer service a C-minus.
“Talk is cheap. Mediocrity is easier than excellence. When service is poor, everyone loses. It is no fun for employees or customers,” he warns.
Customer service determines more than which retailers will prosper and which will fail, Berry argues.
So which companies are doing the best job?
Berry’s book avoids Nordstrom, the retail industry’s poster child for good service, highlighting The Container Store instead.
The Dallas-based home-storage chain is cited by Berry for having a work force of “employees who delight in helping customers solve problems and who possess the freedom and confidence to do so.”
Other companies that win his praise include Enterprise Rent-A-Car, Charles Schwab Corp. and Midwest Express Airlines, a Milwaukee-based airline that serves gourmet food and champagne on every flight.
What do these diverse companies have in common?
The key is “a strong value system that is humane in its foundation,” Berry says. This usually coincides with a top executive who is “a spiritual leader as well as a technical expert.”
Two excellent examples, he says, are Herb Kelleher, the fun-loving chief executive of Southwest Airlines Inc., and Gordon Segal, the passionate founder and CEO of Crate & Barrel.
Paper galore: Office products superstore chain Office Depot Inc. is opening a store in Chicago’s River North on March 22.
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To celebrate the opening at 352 W. Grand Ave., Office Depot is donating $1,000 in gift certificates to the Chicago Urban League. Teenage artists from the city’s Gallery 37 art program will create a permanent mural for the store in June.
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Contact Susan Chandler at [email protected].