Maybe the mall's not dead, after all.

In the wake of its latest earnings shortfall Thursday, catalog retailer

Lands' End

(LE) - Get Report

said it is considering opening bricks-and-mortar stores as an antidote to the slowing growth and spiraling costs plaguing catalog retailers.

Lands' End, once an investor favorite for its rapid growth, has seen its share price plunge following a series of earnings warnings, the latest coming Thursday when the company noted that holiday sales were robust but that higher costs ate into profit margins. Lands' End's recent failures suggest not that management has executed poorly, say analysts, but that the company has wrung all it can from the catalog business.

Out of the Niches

"They should begin to think of adding retail stores so it can become a national brand," says Kevin Silverman, an analyst at

ABN Amro

. With its large database of catalog customers, the company has all the data it needs to decide where retail stores should open: just follow the customers, he says, as have fellow retailers

Talbots

(TLB)

and

Williams-Sonoma

(WSM) - Get Report

. (Silverman has an accumulate rating on Lands' End, and his firm has no banking relationship with the company.)

It wasn't long ago that the Dodgeville, Wis.-based retailer shunned all talk of a bricks-and-mortar expansion. After all, catalog retailers were supposed to enjoy lower fixed costs than traditional retailers, and the advent of the Internet was to boost their business even further.

But "I think that feeling has moderated," says Charlotte Lacomb, director of investor relations at the company. "It's the kind of thing where we don't have anything on the short-term horizon, but it is definitely something we would look at."

The Beatings

Lands End has

repeatedly had to lower its earnings guidance for the investment community, and its shares have taken a beating. Despite Thursday's 5.7% gain, the stock is nearly 60% off its 52-week high.

"Lands End, over many years, has been one of the best for return on equity," says Silverman. "But growth has been sluggish. They have to work on that."

Opening retail shops to complement its catalog business may be just the thing to boost growth. "If they don't, they will remain a niche brand," says Silverman.