PALO ALTO, Calif. (CNN/Money) -
Nearly 10 years ago, Sears Roebuck made a tactical decision to close its famous catalog business, a move to stanch heavy losses from high fulfillment and inventory costs.
The near-term plan was a long-term mistake, however, leaving Sears without an intimate connection to its customers or a way to peddle the kinds of goods that do sell over the phone (and, later, the Internet), primarily apparel.
Sears (S: Research, Estimates) took a major step toward correcting that mistake Monday by agreeing to plunk down $1.9 billion in cash to buy Lands' End, the clothing cataloger that years ago perfected methods for maintaining a direct relationship with its customers without breaking the bank stocking goods. (See more on the deal.)
Retailing pundits wondered Monday whether the well regarded Lands' End (LE: Research, Estimates) brand can survive in low-end Sears retail stores. But that doesn't seem much of a concern. Just consider how two of the best retail analysts I know described Lands' End on Monday: "A cheaper L.L. Bean," said one. "A less cool J. Crew," said another.
Clearly, Lands' End's brand is a good fit for value-conscious Sears. Indeed, Sears and Lands' End actually have similar heritages. Both started in Chicago supplying goods to value-oriented but prosperous consumers through informative catalogs that sometimes made for better reading than contemporaneous magazines. (Of course, Sears started its catalog in 1887 and Lands' End not for another 70 years or so.)
And on the subject of making rights out of wrongs, Lands' End is the master. Begun in the early 1960s as an outfitter of boating accessories, Lands' End is the brainchild of sailing enthusiast and former advertising copywriter Gary Comer, who still owns 52.2 percent of its shares.
I first witnessed how Lands' End capitalizes on its own mistakes when I worked for a year as a part-time clothes salesman in a Chicago-area Lands' End outlet. The retail store was on an unglamorous (read: low rent) suburban downtown street, and it was chock full of mistakes made by Lands' End buyers -- and even its customers.
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RECENTLY BY ADAM LASHINSKY
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Customers were delighted to snap up at steep discounts on the many odd-sized plaid sport coats, boating shoes and mis-monogrammed duffels we stocked. Lands' End cleverly provided a telephone at the front counter that connected directly to the main warehouse in Dodgeville, Wis., so that in-store customers also could order full-priced goods.
Another Lands' End staple: Its famous return policy of "Guaranteed. Period." Every now and again an abuser would appear in our store, attempting -- successfully, of course -- to return a well worn pair of shoes with the complaint that they didn't like them after all. But for the most part the policy reassured shoppers that Lands' End put the customer first.
It can only be encouraging to see the modern Sears acknowledge that it makes mistakes too -- and is willing to correct them.
Adam Lashinsky is a senior writer for Fortune magazine. Send e-mail to Adam at adam_lashinsky@timeinc.com.
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