Dive Brief:

• Lands’ End Inc. Wednesday reported Q4 earnings fell 28%, dragged by a recall of children’s pajamas and the strong dollar. An international sales dip was largely attributable to currency exchange rates, the company said.

• The pajamas were tested by a third party but later failed to meet federal flammability standards, the retailer said. The recall could cost the company as much as $3.4 million in sales and $2.8 million in earnings.

• Q4 net sales and services decreased 4.9% to $504.6 million from $530.4 million in Q4 2013. Same-store sales fell 7.9%, driven by lower performance at stores that remain within Sears stores. The retailer was spun off from Sears about a year ago. 

Dive Insight:

Dodgeville, WI-based Lands’ End could be enjoying the kind of renewed popularity now benefiting L.L. Bean; the two retailers share preppy-outdoorsy DNA. But Lands’ End has suffered from years of its relationship with Sears. Spun off just a year ago, it’s not quite robust enough to easily shake off added stressors like the big product recall or the strong dollar. 

But the year is young, and the retailer is starting off with a new CEO at the helm. Former Dolce & Gabbana president​ Federica Marchionni bring serious fashion chops, but her work is cut out for her.