Dive Brief:

• Struggling retailer Lands’ End on Thursday reported third quarter net revenue of $311.5 million, down from $334.4 million in the year ago period as sales continued to fall both in stores and online.

• Lands' End posted a Q3 loss of $7.2 million or 23 cents per share diluted share. Retail segment net revenue decreased 15.6% year over year to $39.3 million, primarily due to a 14.3% decrease in same-store sales and fewer Lands' End Shops at Sears, the company said. Direct segment (catalog and e-commerce sales) Q3 net revenue decreased 5.5% year over year to $272.1 million.

• Gross margin was 42.9% compared to 48.6% in the third quarter last year. During the quarter, the company wrote down $4.4 million of prior-season inventory from its Canvas brand, which had a 140 basis point negative impact on gross margin.

Dive Insight:

Lands’ End has been a troubled brand for a long time. Former CEO Federica Marchionni, who left the company in September after less than two years at the helm, had high hopes that the reintroduction of its Canvas brand as a collection of on-trend apparel aimed at younger, more fashionable shoppers would reinvigorate the struggling outdoor apparel retailer's appeal among new consumers, but it appears to have been something of a disaster, according to the company’s third quarter report. 

The brand, originally introduced in 2009, initially seemed promising but was soon discontinued after the retailer was hobbled by the struggles of then-parent company Sears. Marchionni once called the revived Canvas brand the "perfect choice" for the company's appeal to a younger market. Although her initiatives failed to gain traction amid its turnaround, co-interim CEO and CFO James Gooch said on Thursday that yet more revamps of the company’s merchandise and marketing strategies began to take hold in the second half of the quarter.

“Following an in-depth review of our recent performance, we have developed and begun to implement a number of initiatives that we believe will enable us to better execute our business strategies and drive improved financial performance,” Gooch said. 

Co-interim CEO Joseph Boitano sought to assure investors the company hasn’t lost sight of its core customer, who values the apparel retailer’s quality and classic designs, even as it continues to seek “newness and innovation” with younger consumers.

"Our first priority is to enhance our classic offering with a focus on key categories that reflect the Lands' End brand heritage with great quality, fit and value,” he said. “We have also refined our marketing strategy with enhancements to our catalog presentation and social media efforts. Taken together, we believe these initiatives will position us to better engage our customers, win back lapsed customers and attract new customers to Lands' End."