On Sept. 8, Loyalty360 posted an article on its home page with the following headline: “Can Lands’ End CEO Turn Things Around and Recapture Brand Loyalty?

Less than three weeks later, there is an answer to that question after Lands’ End CEO Federica Marchionni stepped down from her CEO post on Sept. 26. Marchionni became CEO in February 2015.

The Lands’ End Board of Directors appointed Joseph Boitano and James Gooch as co-Interim Chief Executive Officers, effective immediately. 

Boitano currently serves as Executive Vice President and Chief Merchandising and Design Officer, and Gooch currently serves as Executive Vice President and Chief Operating and Financial Officer. The Board has engaged Heidrick & Struggles, a leading global executive search firm, to assist with identifying a permanent CEO. The search will consider both internal and external candidates.

Josephine Linden, Chairman of the Board of Lands’ End, said: “On behalf of the entire Board, I want to thank Federica for her dedication and contributions to Lands’ End. Her creative vision has helped Lands’ End begin its transformation as a global lifestyle brand with a broader merchandise offering that is more relevant in today’s marketplace. Federica is stepping down at this time, leaving Lands’ End well positioned to continue its evolution and capture the growth opportunities that exist for our iconic brand in this dynamic retail environment.”

The Board concluded that Lands’ End needed to return to sustained profitable growth, and to achieve that, new leadership was needed.
 
When Marchionni became CEO, there was going to be some change from a casual clothing retailer to a higher fashion style, which is slightly different from the brand’s history.

“I am honored to have led this extraordinary company and proud to have succeeded in providing a vision to expand its positioning in the industry with a multi-dimensional strategy,” Marchionni said in a release. “However, the Board of Directors and I have agreed it is time for others to bring Lands’ End into the future. I thank everyone who supported me in this journey and wish Lands’ End the very best.”

Engaging customers and gaining brand loyalty had been foremost among her goals, but the company’s recent second-quarter fiscal performance paints a different picture.

Second-quarter net revenue was $292.0 million, compared to $312.4 million in the second quarter last year. Direct segment net revenue decreased 6.9%, to $246.4 million. Retail segment net revenue decreased 4.3%, to $45.5 million, primarily driven by a 2.5% decrease in same-store sales and a reduction in the number of Lands’ End Shops at Sears.

Loyalty360 CEO and CMO Mark Johnson offered his thoughts on Marchionni’s resignation.

“I think what Marchionni was trying to accomplish was too much,” Johnson explained. “As we continue to talk to brands, we see the question of alignment and ability to execute on. So many brands are being told that they need to be the next Uber, Amazon, or Apple and then try to put in place draconian changes to ‘who they are / who they should be’ without understanding if they are aligned with who they are as companies and their ability to execute on it.”

Chirpify CEO Chris Teso told Loyalty360 that retail is a dynamic market right now with many brands looking to find their footing among changing demographics, consumer demand for utility, and an increased desire for personalization.

“Consumers grokked much more quickly than brands that their smartphone is essentially a remote control for interacting with their favorite brands,” Teso explained. “Retailers that embrace this transition to real-time participation that makes it easy for people to do business with them will have a definite leg up as the market continues to evolve. I would recommend Lands’ End new leadership to look beyond traditional campaign-based marketing activities to unearth an always-on customer experience that dependably recognizes and rewards customer loyalty and advocacy.”

Carrie McIlveen, U.S. Director of Marketing, Metia, told Loyalty360 noted Marchionni’s many changes during her 19-month tenure.

“This transition may have been just too much for their loyal advocates,” McIlveen said. “There seems to be concern on the direction she was taking the company. Plus, her leadership from afar approach by not relocating from the East Coast to the corporate headquarters in Dodgeville, WI, may have resulted in a disconnect. Ideally, Lands’ End will want to solidify the brand image it wants to project and that resonates with its core customers’ lives.”

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