Uniform Sales Sag With Flights Grounded and Students in Sweats

(Bloomberg) --

Uniforms have become collateral damage as industries including hotels, airlines and education struggle to recover from the coronavirus pandemic.

Sales of such attire fell almost 43% last quarter for one of the uniform industry’s biggest providers, Lands’ End Inc., even as the retailer reported strong results across the rest of its business Wednesday.

The bleak uniform numbers speak to the dire conditions for the industries that buy them. The travel and hospitality sectors have been decimated by a near-total shutdown of tourism, leading to mass layoffs at companies like Hilton Worldwide Holdings Inc. and Avis Budget Group Inc. American Airlines Group Inc. and Delta Air Lines Inc. have told workers to expect job cuts in October.

Lands’ End sells uniforms to each of those ailing companies, and about half of its national deals are with travel-related businesses, according to Chief Executive Officer Jerome Griffith. The smaller businesses Lands’ End works with, such as restaurants, also aren’t ordering many new outfits.

“You’re going to find that their businesses are just going to run differently going forward,” Griffith said in an interview. Executives expect demand for the products to remain low at least through the end of the year.

With a wide-ranging retail business that also includes comfy separates, beach towels and home decor, Lands’ End is proving much more resilient than the companies that buy its uniforms. Buoyed by robust online spending, overall revenue rose 4.6% last quarter from a year earlier. It was a rare gain in a quarter that saw many apparel retailers suffer steep declines because of the Covid-19 outbreak.

Shares rose as much as 5% on Wednesday. They had been down 12.1% through Tuesday’s close.

Griffith predicts strong demand ahead for regular casual clothing, especially winter staples like flannel pajamas and sweaters. But it may be a long road back for uniforms.

The school year may provide some early relief. Griffith has seen weekly improvement in school uniform sales in states that had precise reopening plans going into August. Sales are flagging in those states without clear plans, he said.

“It depends on the part of the country,” Griffith said.

©2020 Bloomberg L.P.