Dive Brief:

• Lands’ End Wednesday reported a loss in its latest quarter, hit hard by sales decreases and discounts.

• The catalog and online clothing retailer reported a Q1 net loss of $5.8 million, or $0.18 per share, compared to net income of $1.7 million, or $0.05 per diluted share, in the year-ago quarter. Net revenue was $273.4 million, compared to $299.4 million a year ago. Direct-to-consumer sales net revenue decreased 8.4% to $232.2 million, and physical store net revenue fell 10.4% to $41.2 million, primarily driven by a 7.1% decline in same-store sales and closures of Lands' End shops within Sears stores.

• Lands' End CEO Federica Marchionni said the company is facing the same headwinds as its retail rivals and that it expects those struggles to continue, though she also said that the second quarter will likely see improved results.

Dive Insight:

Lands’ End was spun off from Sears two years ago and since then has been working to recover from what many view as Sears’ neglect of the brand, which continues to have its stalwart fans.

Marchionni came on as CEO from Dolce & Gabbana a little over a year ago. She called 2015 a "transition year" in previous earnings reports, and said 2016 will focus on mixing up product assortment and branding initiatives and improving e-commerce operations.

Marchionni recently re-introduced the retailer’s more youthful Canvas brand in an attempt to reach new customers, and has recruited executives with experience at Saks, J. Crew and Bonobos to help improve design and the supply chain. Lands’ End Chief Marketing Officer and SVP Steven Rado resigned from that position last month, and it’s possible that Rado—a retail veteran from outside the fashion world—was out of step with Marchionni's team.

In any case, Lands’ End has a fairly complex needle to thread these days: Stepping up its fashion game and recapturing the vibe that once resonated with customers, while also maintaining loyalty from its enduring fan base.

Alex Fuhrman, an analyst at Craig-Hallum Capital Group, told Bloomberg earlier this year that Marchionni's efforts bode well for the company, provided that Lands' End doesn't stray too far from its core strengths. “It makes sense for them to try to move slightly toward a younger customer,” Fuhrman said. “As long as they stay focused on their existing demographic.” 

Marchionni says she understands Lands’ End's fundamental appeal. But the company's Q1 results call into question whether her idea of fashion is a great fit for a brand that is closer in spirit to the likes of J. Crew or even LL Bean.