It's Almost Summer -- That Means It's Time for Back-to-School Sales at Lands' End

The clothing retailer pushes the envelope on seasonal sales -- and good taste.

Jun 12, 2014 at 10:05AM


Source: Lands' End. 

Apparently the fruit really doesn't fall far from the tree. Sears Holdings (NASDAQ:SHLD) virtually runs a clinic on pushing the envelope on "season creep," the practice of pushing forward one promotional season, holiday, or sales event well into another -- sometimes months in advance. Its recently spun-off clothing chain, Lands' End (NASDAQ:LE), has seemingly learned the trade well while sitting at its former parent's knee, as it's offering back-to-school sales before kids have even finished up for summer recess.

A few years back Sears created an online shop called "Christmas Lane" that appeared in July. It surpassed that last year when its Kmart division ran Christmas sales before kids returned to school in September. It was said to be the earliest time ever a retailer has tried to juice its sales by using Christmas in its advertising. It went further still when it opened at 6 a.m. on Thanksgiving in a bid to jump-start Black Friday sales and didn't close its doors again until nearly two days later.

Now Lands' End is jumping on the early sales promotion bandwagon, already hyping back-to-school sales before summer's even arrived. According to CNBC, the apparel retailer was emailing ads offering sales on school uniforms for the new year.

Spun off from Sears in March, Lands' End was seen as one of the few profitable divisions of the once venerable retailer even if, like its parent, it has suffered from declining sales over a period of years. Where net income jumped 58% in 2013 to $78.8 million, revenues were down 1.5%, and have been falling for four straight years. No doubt the early push for school clothes is an attempt to juice results, but really all its serves to do is pull sales forward, not raise the level.

Yet does it also serve to turn off shoppers? Sears reaped zero benefit from all its promotional efforts last year. In its third-quarter report, revenues tumbled 6.7% to $8.3 billion as domestic comparables dropped 3.1% from the year-ago period. In the fourth quarter that ended this past Feb. 1 and included all of the Christmas overload, sales plunged nearly 14% and same-store sales doubled their decline from the previous quarter, falling 6.4%. As difficult a holiday as it was for almost all retailers, it says a lot that the one pushing sales the hardest suffered the worst.

Screen Shot

Source: Sears Holdings SEC filings

By starting down the same path its former parent blazed, it's quite possible Lands' End is setting itself up for a similarly dismal performance. The CNBC article quotes one analyst as saying there's no one even thinking about back-to-school sales now, and research suggests at best it will begin in earnest next month before reaching a fever pitch in August.

While it's arguable there's no harm, no foul by trying to gain an edge by getting a head start on the competition, it's apparent it quickly becomes a case that year-long sales with no true differentiation don't ingratiate the retailer with the consumer. As we saw with Christmas, when it's all sales, all the time, consumers tune out the opportunity.

Holiday fatigue is certainly growing around the end-of-year sales push, and holiday creep adds to the feeling of exasperation. We want to enjoy Thanksgiving dinner (let alone Halloween) without having to think about Christmas, and parents want to enjoy the end of the school year without stressing over the start of class in the fall. Lands' End risks being the bad apple that ruins the whole barrel by trying to force us to confront readin', 'riting, and 'rithmetic again before we've even gotten our diploma.

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