Lands’ End CEO Says Factory Delays Impact Holiday Forecast

Lands' End CEO Says Factory Delays Impact Holiday Forecast

According to clothing retailer Lands End, consumer demand isn’t the issue – it’s getting products to the shelves on time.

Shares of the retailer closed more than 9% lower on Thursday at $ 31.10. Although the company posted better-than-expected financial results in the second quarter, supply chain issues make its outlook uncertain and lower its share price.

Jerome Griffith, CEO of Lands’ End, said in an interview: “You have countries that are critical to manufacturing like Vietnam. Currently, southern Vietnam is completely closed from mid-July to at least mid-September. “CNBC’s“ Power Lunch ”.

Lands End said the plant closures are a result of the ongoing global pandemic and have made it difficult to accurately predict how the company will perform during the holiday season. American buyers want to restock their wardrobe, but it is not always easy for them to source the product.

Lands End expects supply chain issues to affect profit margins in the second half of the year. Retailers must pay higher prices for goods amid high consumer demand. In addition, transportation costs increase as retailers try to speed up the receipt of orders.

Griffith said bottlenecks exist in the supply chain.

“You see that the products are finished in the factories, the containers cannot be reserved. Containers arrive on ships, but ships cannot enter the port. And once at the port, there is therefore a shortage of truck drivers transporting goods from the port. Everywhere they need to go, ”he said.

Griffith said sea containers could cost up to four times what they were a year ago.

Sometimes higher costs can be offset by higher prices, but this is not a guarantee.

“In a lot of cases, what’s going to happen in the industry, will it be passed on to the consumer,” Griffiths said. Lands End uses artificial intelligence to predict where it might raise prices based on peaks in consumer demand.

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