Sears, Lands' End Prep For Tech Challenges

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May 20, 2002 (Computerworld) -- Well known for its catalog and online operations, Lands' End Inc. will now learn the fine points of making sure its fleece-lined jackets, turtlenecks and other apparel lines are well stocked in 870 retail stores throughout the U.S.

When Sears, Roebuck and Co. last week announced its intention to buy the Dodgeville, Wis.-based retailer for $1.9 billion, Lands' End not only gained access to a nationwide chain of stores. It also garnered new chances for systems integration and different sorts of IT challenges associated with planning and distributing crates of inventory to retail stores, rather than picking, packing and shipping items for individual customers.

Sears CIO Jerry Miller said a team from both companies, including IT personnel, will look for opportunities to integrate systems, share best practices and create links to each other's Web sites. But since Lands' End will operate separately as a wholly owned subsidiary, Hoffman Estates, Ill.-based Sears will deal with its new acquisition in much the same way it deals with other vendors, minimizing the need for extensive systems integration work, Miller said.

"It makes it very easy, very simple and very quick," he said.

But some analysts predicted that the two retailers eventually will want to do more systems integration work to make sure the merger goes well. Geri Spieler, an analyst at Stamford, Conn.-based Gartner Inc., said they will need to integrate inventory, replenishment, forecasting and merchandising systems to maintain Lands' End's good reputation.

"There's a higher expectation of performance," she said, adding that Sears won't be able to deal with Lands' End in the same way it deals with other suppliers.

James Dion, president of Dionco Inc., a Chicago retail consultancy, said the retailers will want to make sure they're carrying the right amount of inventory and predicting demand properly, potentially necessitating some heavy integration work.

"If Lands' End orders too much and Sears can't take it, what does Lands' End do with it?" Dion said. "They are going to have their catalog and Web operation, but there is no other kind of safety valve that the ordinary arm's-length vendor would have."

To anticipate Sears' needs, Lands' End will want to get access to point-of-sale information to spot sales trends and better prepare for resupplying goods, he said.

"Buying in retail is very different than buying for catalog," said Dion, who formerly worked in buying at Sears.

Gartner analyst Adam Sarner said Sears and Lands' End will want to find ways to share customer data between their online and in-store channels in order to spot their most profitable customers and do better supply chain planning.

Chris Merritt, an analyst at Atlanta-based Kurt Salmon Associates, a retail consultancy that has worked with both Sears and Lands' End, said there could be a "real business risk" associated with Sears trying to absorb Lands' End.

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Sears, Lands' End Prep For Tech Challenges

Sears CIO: IT Departments to Remain Separate

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• Sears, Lands' End Prep For Tech Challenges
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