Two years later, Sears is scaling back the brand for children, recognizing that parents are reluctant to spend $24 on a pair of Lands' End shorts when the private-label Covington brand is on sale for $8 nearby.
The nation's biggest department store chain suffered disappointing earnings in the second quarter due largely to weak apparel sales. The results even prompted one Wall Street analyst, during a July conference call with Sears' executives, to ask if the retailer should stop selling clothing altogether.
Sears acknowledges that its missteps--including shortages of spring clothing in both classic and trendier lines--are getting to be a pattern.
"This has been a hard slog," Sears Chief Executive Alan Lacy replied to analyst Michael Exstein.
Others take a more jaundiced view: "The company seems fated to make the wrong bet on apparel time and time again," said Carol Levenson, research director for Gimme Credit Publications Inc.
"We fear that after a quarter in which management blamed weak apparel sales on the lack of fashionable merchandise in its stores, the company will load up on ponchos and bright colors just when these fads are fading," she said.
The clothing difficulties come at an inopportune time for Sears.
September marks the one-year anniversary of Lands' End being carried in all 870 Sears stores.
Sears also will start selling a full assortment of clothing over its Sears.com Web site starting next month. Currently, the only clothes offered online are school uniforms or pieces linked to specialty catalogs.
"We're excited about it," said Gwen Manto, Sears' apparel general manager. Even with the limited attire on Sears' Web site, "clothing" gets the third-highest number of clicks--after "search" and "appliances."
But Internet apparel selling has been tough for even the mightiest merchant. Wal-Mart Stores Inc. recently announced it would take another stab at online clothing after an earlier effort failed.
And Wal-Mart sells more clothing than anyone else.
Relatively few shoppers, in contrast, spend most of their clothing budget at Sears, according to Retail Forward. In a survey of shoppers from November through June, only 2 percent of respondents identified Sears as the place they spent the most money on apparel, the researcher found. Named most often, at 21 percent, was Wal-Mart.
"I'm a great believer in a company sticking to what it does well," Gimme Credit's Levenson said. "Sears hasn't been able to differentiate itself and succeed in apparel for years."
But, she and others add, it's highly unlikely Sears will punt on apparel.
For one thing, clothing profit margins surpass those of other goods. Gross margins for clothing stores are 42.4 percent, according to a study released in March by the U.S. Census Bureau. That compares with margins of 27.8 percent for electronics stores and 24.7 percent for general merchandise stores.
Also, apparel brings people into stores more frequently than durable goods such as appliances.