Donald Hughes knows a thing or two about moving up the corporate ladder.
After graduating from the University of Wisconsin in 1985, Hughes signed on at Arthur Andersen, where he worked for two years. Then, in 1987, he signed on as staff accountant at an up-and-coming clothing retailer. The company? Catalogue specialist Lands’ End.
Hughes has never looked back. Nine years after joining the Dodgeville, Wisc.-based company, he was appointed vice president of finance. In February 2001, Hughes was named chief financial officer.
Under his financial leadership, Lands’ End has picked up some much needed momentum. In concert with CEO David Dyer (on board in 1999), Hughes has focused on slashing prices, reducing excess inventory, and getting rid of businesses that were not profitable. Indeed, Dyer’s and Hughes’ recent efforts have pushed Lands’ End revenues and operating income to record levels. In the first nine months of fiscal 2002, total revenue at the retailer increased to $973 million, up 5 percent from the same period the previous year. Net income also rose, to $21 million. That was a huge jump up from the $2.9 million in earnings the company reported in the first nine months of 2001.
Hughes recently spoke to CFO.com’s Jennifer Caplan about developing new revenue streams, using the Internet to reach customers, and how Land’s End has been able to dramatically boost earnings amid a sluggish economy.
You have been at Lands’ End for the greater part of your career. What drew you to the company and what has kept you there for the past 15 years?
Lands’ End had gone public only a year before I joined, so there was a fair amount of publicity around the company. It was seen as a fast-growing business and one that had the potential to be very successful. On a more practical level, I also grew up about 20 miles outside of Dodgeville, where Lands’ End is located in southwest Wisconsin. That stability also played a role.
What have been some of the critical experiences in your career that you feel have gotten you where you are today?
I really made an effort to get involved in fostering some of Lands’ End’s new businesses, which I think really helped bolster my career. I’ve been very much involved in our international expansion, and have helped get those businesses off the ground, basically from scratch. I helped get our U.K. business going in 1991, for example, and later our Japan and Germany businesses as well. Our international businesses have now grown to be about 10 percent of our total business.
You joined Lands’ End from Arthur Andersen. At the time you joined, was Arthur Andersen the company’s auditor?
Yes. Arthur Andersen’s small business division was auditing Lands’ End at the time. I was never on that engagement, however. Arthur Andersen continues to be our auditor today.
Often, CFOs join companies from the audit firms that oversee that company’s books. Do you think that can lead to a potentially dangerous relationship?