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x
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Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
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¨
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Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
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Delaware
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36-2512786
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(State or Other Jurisdiction of
Incorporation of Organization)
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(I.R.S. Employer
Identification No.)
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1 Lands’ End Lane
Dodgeville, Wisconsin
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53595
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class:
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Name of each exchange on which registered:
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Common stock, par value $0.01 per share
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The NASDAQ Stock Market
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
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Smaller Reporting Company
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¨
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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||
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(in thousands)
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Fiscal 2015
|
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Fiscal 2014
|
|
Fiscal 2013
|
||||||
Net revenue
|
|
|
|
|
|
||||||
Apparel
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$
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1,156,047
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$
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1,248,847
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$
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1,245,670
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Non-apparel
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183,073
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220,385
|
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226,302
|
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|||
Services and other
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80,658
|
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86,121
|
|
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90,904
|
|
|||
Total net revenue
|
$
|
1,419,778
|
|
|
$
|
1,555,353
|
|
|
$
|
1,562,876
|
|
(in thousands)
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Net revenue:
|
|
|
|
|
|
||||||
Direct
|
$
|
1,214,993
|
|
|
$
|
1,320,642
|
|
|
$
|
1,303,862
|
|
Retail
|
204,566
|
|
|
234,632
|
|
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258,922
|
|
|||
Corporate/ other
|
219
|
|
|
79
|
|
|
92
|
|
|||
Total net revenue
|
$
|
1,419,778
|
|
|
$
|
1,555,353
|
|
|
$
|
1,562,876
|
|
•
|
Product and Merchandising: creating a merchandise architecture to enhance our current offering and also appeal to a broader customer base by rationalizing the current assortment to make offerings both timely and timeless to existing customers, and creating new assortments to strategically capitalize on high-margin categories and developing tailored fits for diverse body shapes.
|
•
|
Brand and Marketing: while maintaining a consistent overall spend amount, we will be more efficient enabling us to invest in initiatives that we believe will yield benefits over the long term and amplify brand awareness by leveraging the brand DNA, improving creative ways of engaging customers in order to expand our customer base and influence credibility and relevance.
|
•
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Operations and Technology: improved web technology to support higher conversion rates and leveraging information technology as an innovation enabler to establish strong operations and increase productivity within each department while maintaining our high standards of quality, value and service.
|
•
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Distribution: expanding and adapting distribution strategies to achieve an optimal blend of retail, online and other channels to seize market opportunities and grow top-line and profitability across channels.
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•
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Talent: continue long-term investment in human capital management to achieve a flexible organization that can face any challenge.
|
•
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Lands’ End Named Customer Service Champion, Source: Prosper Insights & Analytics Featured on Forbes.com (March 30, 2015)
|
•
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Lands’ End Earns StellaService’s Elite Award, which is awarded to Top 10% of retailers who provide the very best in customer care, Source: StellaService (May 4, 2015)
|
•
|
Lands' End Tops Internet Retailer's List of Most Responsive Brands on Social Media, Source: Internet Retailer (November 3, 2015)
|
•
|
100% of Lands’ End Agents Rated 4.5 Stars or Higher By Consumers, Source: StellaService (December 1, 2015)
|
•
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A new multi-brand architecture that provides flexible and compelling ways for customers to discover and engage with brand-specific assortments and visual experiences.
|
•
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Streamlined checkout, optimized for mobile and tablet shoppers to capture an increasing share of sales as customer migrate to mobile devices.
|
•
|
Convenient payment types including Visa Pay to simplify checkout, especially from mobile devices.
|
•
|
Improved search and navigation to help customers quickly find products that best fulfill their product and style preferences.
|
•
|
New E- catalogs, which allow prospective and existing customers to view and shop our products in a new and innovative way. Our new E-catalog can be viewed at www.landsend.com.
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Name
|
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Position
|
|
Age
|
|
Date First Became an Executive Officer
|
Federica Marchionni
|
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President and Chief Executive Officer
|
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44
|
|
2015
|
James F. Gooch
|
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Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer
|
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48
|
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2016
|
Joseph M. Boitano
|
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Executive Vice President and Chief Merchandising and Design Officer
|
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65
|
|
2015
|
Scott D. Hyatt
|
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Executive Vice President, Chief Supply Chain Officer
|
|
58
|
|
2015
|
Steven G. Rado
|
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Senior Vice President, Chief Marketing Officer
|
|
52
|
|
2014
|
Kelly Ritchie
|
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Senior Vice President, Employee and Customer Services
|
|
52
|
|
1999
|
Dorian R. Williams
|
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Senior Vice President, General Counsel and Corporate Secretary
|
|
56
|
|
2014
|
•
|
the burdens of complying with a variety of foreign laws and regulations, including trade and labor restrictions;
|
•
|
economic and political instability in the countries and regions where our customers or vendors are located;
|
•
|
adverse fluctuations in currency exchange rates;
|
•
|
compliance with United States and other country laws relating to foreign operations, including the Foreign Corrupt Practices Act, which prohibits United States companies from making improper payments to foreign officials for the purpose of obtaining or retaining business, and the U.K. Bribery Act, which prohibits U.K. and related companies from any form of bribery;
|
•
|
changes in United States and non-United States laws (or changes in the enforcement of those laws) affecting the importation and taxation of goods, including duties, tariffs and quotas, enhanced security measures at United States ports, or imposition of new legislation relating to import quotas;
|
•
|
increases in shipping, labor, fuel, travel and other transportation costs;
|
•
|
the imposition of anti-dumping or countervailing duty proceedings resulting in the potential assessment of special anti-dumping or countervailing duties;
|
•
|
transportation delays and interruptions, including due to the failure of vendors or distributors to comply with import regulations; and
|
•
|
political instability and acts of terrorism.
|
•
|
changes in or interpretations of laws and regulations, including changes in accounting standards, taxation requirements, product marketing application standards and environmental laws;
|
•
|
differences between the fair value measurement of assets and liabilities and their actual value, particularly for intangibles and goodwill; and for contingent liabilities such as litigation, the absence of a recorded amount, or an amount recorded at the minimum, compared to the actual amount;
|
•
|
changes in the rate of inflation, interest rates and the performance of investments held by us;
|
•
|
changes in the creditworthiness of counterparties that transact business with or provide services to us; and
|
•
|
changes in business, economic and political conditions, including war, political instability, terrorist attacks, the threat of future terrorist activity and related military action; natural disasters; the cost and availability of insurance due to any of the foregoing events; labor disputes, strikes, slow-downs or other forms of labor or union activity; and pressure from third-party interest groups.
|
•
|
Prior to the Separation, Sears Holdings or one of its affiliates performed various corporate functions for us. Following the Separation, Sears Holdings or its subsidiaries provides some of these functions to us. Our historical financial results prior to the Separation reflect allocations of corporate expenses from Sears Holdings for these functions and are likely to be less than the expenses we would have incurred had we operated as a separate publicly traded company. Following the Separation, we may not be able to perform these functions as efficiently or at comparable costs;
|
•
|
Prior to the Separation, we were able to use Sears Holdings’ size and purchasing power in procuring various goods and services and have shared economies of scope and scale in costs, employees, vendor relationships and customer relationships. Although we entered into a transition services agreement and other commercial agreements with Sears Holdings or its subsidiaries in connection with the Separation, these arrangements may not fully capture the benefits we enjoyed as a result of being integrated with Sears Holdings and may result in us paying higher charges than in the past for these services. As a separate, publicly traded company, we may be unable to obtain goods and services at the prices and terms obtained prior to the Separation, which could have an adverse effect on our business and results of operations;
|
•
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Generally, our working capital requirements and capital for our general corporate purposes were satisfied as part of the corporate-wide cash management policies of Sears Holdings. As an independent company, we may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements; and
|
•
|
Our financial information for periods prior to the Separation does not reflect the debt we incurred in connection with the Separation.
|
•
|
entering into any transaction resulting in the acquisition of 40% or more of our stock or 60% or more of our assets, whether by merger or otherwise;
|
•
|
merging, consolidating or liquidating;
|
•
|
issuing equity securities beyond certain thresholds;
|
•
|
repurchasing capital stock beyond certain thresholds; and
|
•
|
ceasing to be engaged in our pre-Separation business.
|
•
|
we could be required to use a substantial portion of our cash flow from operations to pay principal (including amortization) and interest on our debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, strategic acquisitions and other general corporate requirements or causing us to make non-strategic divestitures;
|
•
|
our interest expense could increase if prevailing interest rates increase, because a substantial portion of our debt bears interest at variable rates;
|
•
|
our substantial leverage could increase our vulnerability to economic downturns and adverse competitive and industry conditions and could place us at a competitive disadvantage compared to those of our competitors that are less leveraged;
|
•
|
our debt service obligations could limit our flexibility in planning for, or reacting to, changes in our business, our industry and changing market conditions and could limit our ability to pursue other business opportunities, borrow more money for operations or capital in the future and implement our business strategies;
|
•
|
our level of debt may restrict us from raising additional financing on satisfactory terms to fund working capital, capital expenditures, strategic acquisitions and other general corporate requirements;
|
•
|
the agreements governing our debt contain covenants that limit our ability to pay dividends or make other restricted payments and investments;
|
•
|
the agreements governing our debt contain operating covenants that limit our ability to engage in activities that may be in our best interests in the long term, including, without limitation, by restricting our subsidiaries’ ability to incur debt, create liens, enter into transactions with affiliates or prepay certain kinds of indebtedness; and
|
•
|
the failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of the applicable debt, may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies, and in the event our creditors accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that debt.
|
•
|
actual or anticipated fluctuations in our operating results;
|
•
|
changes in earnings estimated by securities analysts or our ability to meet those estimates;
|
•
|
the operating and stock price performance of comparable companies;
|
•
|
changes to the regulatory and legal environment under which we operate; and
|
•
|
domestic and worldwide economic conditions.
|
|
|
Fiscal 2015
|
||||||
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
Common Stock Price
|
|
|
|
|
|
|
|
|
High
|
|
$37.45
|
|
$30.50
|
|
$28.92
|
|
$25.62
|
Low
|
|
28.85
|
|
23.06
|
|
21.26
|
|
20.95
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2014
|
||||||
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
Common Stock Price
|
|
|
|
|
|
|
|
|
High
|
|
$35.00
|
|
$37.92
|
|
$48.25
|
|
$56.25
|
Low
|
|
25.35
|
|
26.03
|
|
32.03
|
|
34.58
|
|
3/20/2014
|
1/30/2015
|
1/29/2016
|
||||||
Lands' End, Inc.
|
$
|
100
|
|
$
|
104
|
|
$
|
65
|
|
NASDAQ Composite Index
|
$
|
100
|
|
$
|
107
|
|
$
|
107
|
|
NASDAQ Retail Index
|
$
|
100
|
|
$
|
107
|
|
$
|
108
|
|
Plan Category
|
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and
rights
(in thousands)
|
|
Weighted-average
exercise price of
outstanding
options,
warrants and
rights
|
|
Number of securities
remaining available for
future issuance
under equity
compensation plans*
(in thousands)
|
Equity compensation plans approved by security holders
|
|
284
|
|
—
|
|
681
|
Equity compensation plans not approved by security holders
|
|
—
|
|
—
|
|
—
|
Total
|
|
284
|
|
—
|
|
681
|
*
|
Represents shares of common stock that may be issued pursuant to the Lands’ End, Inc. 2014 Stock Plan as amended (the “2014 Stock Plan”). Awards under the 2014 Stock Plan may be restricted stock, stock unit awards, incentive stock options, nonqualified stock options, stock appreciation rights, or certain other stock-based awards. The numbers shown exclude shares covered by an outstanding plan award that, subsequent to January 29, 2016, ultimately are not delivered on an unrestricted basis (for example, because the award is forfeited, canceled or used to satisfy tax withholding obligations).
|
|
Fiscal Year
|
||||||||||||||||||
(in thousands, except per share data and number of stores)
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Consolidated and Combined Statement of Comprehensive Operations Data
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
1,419,778
|
|
|
$
|
1,555,353
|
|
|
$
|
1,562,876
|
|
|
$
|
1,585,927
|
|
|
$
|
1,725,627
|
|
Net (loss) income
(2)(3)
|
$
|
(19,548
|
)
|
|
$
|
73,799
|
|
|
$
|
78,847
|
|
|
$
|
49,827
|
|
|
$
|
76,234
|
|
Basic and diluted (loss) earnings per common share
(2)(3)(4)
|
$
|
(0.61
|
)
|
|
$
|
2.31
|
|
|
$
|
2.47
|
|
|
$
|
1.56
|
|
|
$
|
2.39
|
|
Basic average shares outstanding
|
31,979
|
|
|
31,957
|
|
|
31,957
|
|
|
31,957
|
|
|
31,957
|
|
|||||
Diluted average shares outstanding
|
31,979
|
|
|
32,016
|
|
|
31,957
|
|
|
31,957
|
|
|
31,957
|
|
|||||
Consolidated Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
1,288,526
|
|
|
$
|
1,349,999
|
|
|
$
|
1,194,275
|
|
|
$
|
1,217,722
|
|
|
$
|
1,238,923
|
|
Other Financial and Operating Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
(5)
|
$
|
107,288
|
|
|
$
|
164,298
|
|
|
$
|
150,010
|
|
|
$
|
107,673
|
|
|
$
|
144,996
|
|
Number of retail stores at year end
|
246
|
|
|
255
|
|
|
290
|
|
|
293
|
|
|
306
|
|
(1)
|
Our fiscal year end is on the Friday preceding the Saturday closest to January 31 each year. Fiscal year 2012 consisted of 53 weeks. All other fiscal years consisted of 52 weeks.
|
(2)
|
Fiscal 2015 Net loss includes an impairment charge of $98.3 million, $62.0 million net of tax, related to the non-cash write-down of our trade name asset, Lands' End.
|
(3)
|
Fiscal 2015 and Fiscal 2014 Net (loss) income includes interest expense and stand-alone public company expenses which did not exist in prior periods.
|
(4)
|
On April 4, 2014, Sears Holdings distributed 31,956,521 shares of Lands’ End common stock. The computation of basic and diluted shares for all periods prior to April 4, 2014 was calculated using the number of shares of Lands’ End common stock outstanding on April 4, 2014. The same number of shares was used to calculate basic and diluted earnings per share. Refer to Note 2,
Summary of Significant Accounting Policies
, to the Consolidated and Combined Financial Statements for information regarding earnings per share.
|
(5)
|
Adjusted EBITDA
—In addition to our net (loss) income determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”), for purposes of evaluating operating performance, we use Adjusted EBITDA, which is adjusted to exclude certain significant items as set forth below. Our management uses Adjusted EBITDA to evaluate the operating performance of our business for comparable periods. This metric is also incorporated into executive compensation plans when compared to our budgeted operating performance. Adjusted EBITDA should not be used by investors or other third parties as the sole basis for formulating investment decisions as it excludes a number of important cash and non-cash recurring items. Adjusted EBITDA should not be considered as a substitute for GAAP measurements.
|
•
|
EBITDA excludes the effects of financings, investing activities and tax structure by eliminating the effects of interest, depreciation and income tax costs; and
|
•
|
Other significant items, while periodically affecting our results, may vary significantly from period to period and have a disproportionate effect in a given period, which affects comparability of results. We have adjusted our results for these items to make our statements more comparable and therefore more useful to investors as the items are not representative of our ongoing operations.
|
•
|
Intangible asset impairment—charge associated with the non-cash write-down of our trade name asset, Lands' End, in Fiscal 2015.
|
•
|
Product recall—costs associated with a recall of selected styles of children's sleepwear in Fiscal 2014 that did not meet the federal flammability standard for children's sleepwear and the subsequent reversal of some costs in Fiscal 2015 as customer return rates were lower than Company estimates.
|
•
|
Restructuring costs—costs associated with an initiative to reduce the corporate cost structure in Fiscal 2013. Management considers these costs to be infrequent and affecting comparability of results between reporting periods.
|
•
|
Gain or loss on the sale of property and equipment—management considers the gains or losses on sale of assets to result from investing decisions rather than ongoing operations.
|
|
Fiscal Year
|
||||||||||||||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Net (loss) income
|
$
|
(19,548
|
)
|
|
$
|
73,799
|
|
|
$
|
78,847
|
|
|
$
|
49,827
|
|
|
$
|
76,234
|
|
Income tax (benefit) expense
|
(9,691
|
)
|
|
46,758
|
|
|
49,544
|
|
|
32,243
|
|
|
45,669
|
|
|||||
Other income, net
|
(671
|
)
|
|
(1,408
|
)
|
|
(50
|
)
|
|
(67
|
)
|
|
(95
|
)
|
|||||
Interest expense
|
24,826
|
|
|
20,494
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Intangible asset impairment
|
98,300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Depreciation and amortization
|
17,399
|
|
|
19,703
|
|
|
21,599
|
|
|
23,121
|
|
|
22,686
|
|
|||||
Product recall
|
(3,371
|
)
|
|
4,713
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
2,479
|
|
|
—
|
|
|||||
Loss on sale of property and equipment
|
44
|
|
|
239
|
|
|
70
|
|
|
70
|
|
|
502
|
|
|||||
Adjusted EBITDA
|
$
|
107,288
|
|
|
$
|
164,298
|
|
|
$
|
150,010
|
|
|
$
|
107,673
|
|
|
$
|
144,996
|
|
•
|
Executive overview
. This section provides a brief description of our business, accounting basis of presentation and a brief summary of our results of operations.
|
•
|
Discussion and analysis
. This section highlights items affecting the comparability of our financial results and provides an analysis of our combined and segment results of operations for
Fiscal 2015
,
Fiscal 2014
and
Fiscal 2013
.
|
•
|
Liquidity and capital resources
. This section provides an overview of our historical and anticipated cash and financing activities. We also review our historical sources and uses of cash in our operating, investing and financing activities.
|
•
|
Contractual Obligations and Off-Balance-Sheet Arrangements.
This section provides details of the Company's off-balance-sheet arrangements and contractual obligations for the next 5 years and thereafter.
|
•
|
Financial Instruments with Off-Balance-Sheet Risk.
This section discusses financial instruments of the Company that could have off-balance-sheet risk.
|
•
|
Quantitative and qualitative disclosures about market risk
. This section discusses how we monitor and manage market risk related to changing currency rates. We also provide an analysis of how adverse changes in market conditions could impact our results based on certain assumptions we have provided.
|
•
|
Application of critical accounting policies and estimates
. This section summarizes the accounting policies that we consider important to our financial condition and results of operations and which require significant judgment or estimates to be made in their application.
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
|||||||||||||||
(in thousands)
|
$’s
|
|
% of Net
Revenue |
|
$’s
|
|
% of Net
Revenue |
|
$’s
|
|
% of Net
Revenue |
|||||||||
Net revenue:
|
$
|
1,419,778
|
|
|
100.0
|
%
|
|
$
|
1,555,353
|
|
|
100.0
|
%
|
|
$
|
1,562,876
|
|
|
100.0
|
%
|
Cost of sales (excluding depreciation and amortization)
|
767,189
|
|
|
54.0
|
%
|
|
819,422
|
|
|
52.7
|
%
|
|
852,539
|
|
|
54.5
|
%
|
|||
Gross profit
|
652,589
|
|
|
46.0
|
%
|
|
735,931
|
|
|
47.3
|
%
|
|
710,337
|
|
|
45.5
|
%
|
|||
Selling and administrative
|
545,301
|
|
|
38.4
|
%
|
|
573,335
|
|
|
36.9
|
%
|
|
560,327
|
|
|
35.9
|
%
|
|||
Depreciation and amortization
|
17,399
|
|
|
1.2
|
%
|
|
19,703
|
|
|
1.3
|
%
|
|
21,599
|
|
|
1.4
|
%
|
|||
Intangible asset impairment
|
98,300
|
|
|
6.9
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Other operating (income) expense, net
|
(3,327
|
)
|
|
(0.2
|
)%
|
|
3,250
|
|
|
0.2
|
%
|
|
70
|
|
|
—
|
%
|
|||
Operating (loss) income
|
(5,084
|
)
|
|
(0.4
|
)%
|
|
139,643
|
|
|
9.0
|
%
|
|
128,341
|
|
|
8.2
|
%
|
|||
Interest expense
|
24,826
|
|
|
1.7
|
%
|
|
20,494
|
|
|
1.3
|
%
|
|
—
|
|
|
—
|
%
|
|||
Other income, net
|
(671
|
)
|
|
—
|
%
|
|
(1,408
|
)
|
|
(0.1
|
)%
|
|
(50
|
)
|
|
—
|
%
|
|||
(Loss) income before income taxes
|
(29,239
|
)
|
|
(2.1
|
)%
|
|
120,557
|
|
|
7.8
|
%
|
|
128,391
|
|
|
8.2
|
%
|
|||
Income tax (benefit) expense
|
(9,691
|
)
|
|
(0.7
|
)%
|
|
46,758
|
|
|
3.0
|
%
|
|
49,544
|
|
|
3.2
|
%
|
|||
Net (loss) income
|
$
|
(19,548
|
)
|
|
(1.4
|
)%
|
|
$
|
73,799
|
|
|
4.8
|
%
|
|
$
|
78,847
|
|
|
5.0
|
%
|
•
|
EBITDA excludes the effects of financings, investing activities and tax structure by eliminating the effects of interest, depreciation and income tax costs.
|
•
|
Other significant items, while periodically affecting our results, may vary significantly from period to period and have a disproportionate effect in a given period, which affects comparability of results. We have adjusted our results for these items to make our statements more comparable and therefore more useful to investors as the items are not representative of our ongoing operations.
|
▪
|
Intangible asset impairment—change associated with the non-cash write-down of our trade name asset, Lands' End, in Fiscal 2015.
|
▪
|
Product recall—costs associated with a recall of selected styles of children's sleepwear in Fiscal 2014 that did not meet the federal flammability standard for children's sleepwear and the subsequent reversal of some costs in Fiscal 2015 as customer return rates were lower than Company estimates.
|
▪
|
Gain or loss on the sale of property and equipment—management considers the gains or losses on sale of assets to result from investing decisions rather than ongoing operations.
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
|||||||||||||||
(in thousands)
|
$’s
|
|
% of Net
Revenue |
|
$’s
|
|
% of Net
Revenue |
|
$’s
|
|
% of Net
Revenue |
|||||||||
Net (loss) income
|
$
|
(19,548
|
)
|
|
(1.4
|
)%
|
|
$
|
73,799
|
|
|
4.8
|
%
|
|
$
|
78,847
|
|
|
5.0
|
%
|
Income tax (benefit) expense
|
(9,691
|
)
|
|
(0.7
|
)%
|
|
46,758
|
|
|
3.0
|
%
|
|
49,544
|
|
|
3.2
|
%
|
|||
Other income, net
|
(671
|
)
|
|
—
|
%
|
|
(1,408
|
)
|
|
(0.1
|
)%
|
|
(50
|
)
|
|
—
|
%
|
|||
Interest expense
|
24,826
|
|
|
1.7
|
%
|
|
20,494
|
|
|
1.3
|
%
|
|
—
|
|
|
—
|
%
|
|||
Operating (loss) income
|
(5,084
|
)
|
|
(0.4
|
)%
|
|
139,643
|
|
|
9.0
|
%
|
|
128,341
|
|
|
8.2
|
%
|
|||
Intangible asset impairment
|
98,300
|
|
|
6.9
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Depreciation and amortization
|
17,399
|
|
|
1.2
|
%
|
|
19,703
|
|
|
1.3
|
%
|
|
21,599
|
|
|
1.4
|
%
|
|||
Product recall
|
(3,371
|
)
|
|
(0.2
|
)%
|
|
4,713
|
|
|
0.3
|
%
|
|
—
|
|
|
—
|
%
|
|||
Loss on disposal of property and equipment
|
44
|
|
|
—
|
%
|
|
239
|
|
|
—
|
%
|
|
70
|
|
|
—
|
%
|
|||
Adjusted EBITDA
|
$
|
107,288
|
|
|
7.6
|
%
|
|
$
|
164,298
|
|
|
10.6
|
%
|
|
150,010
|
|
|
9.6
|
%
|
•
|
Lower revenues, which drove a decrease in Net (loss) income before non-cash items and an increase in inventory,
|
•
|
Increased inventory purchases to replenish inventory levels, as beginning inventory for
Fiscal 2014
was
$68.6 million
more than beginning inventory for
Fiscal 2015
,
|
•
|
Cash payments for taxes and incentive compensation, and
|
•
|
The one time impact in Fiscal 2014 of items that were settled through inter-company transactions with our former parent prior to the separation as described further below.
|
•
|
Improved inventory management,
|
•
|
The net effect of changes in the settlement methods with our former parent company and certain suppliers resulting from the Separation, including $28.8 million in Accounts payable less $3.5 million in Accounts receivable, as these items would have been included in equity as part of Net parent company investment prior to the Separation on April 4, 2014 from Sears Holdings, and
|
•
|
Increased Operating income, partially offset by
|
•
|
Interest payments on debt.
|
|
Payments Due by Period
|
||||||||||||||||||
(in thousands)
|
Total
|
|
Less than 1 year
|
|
2-3 Years
|
|
4-5 Years
|
|
After 5 years
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating leases
(1)
|
$
|
91,416
|
|
|
$
|
28,653
|
|
|
$
|
45,700
|
|
|
$
|
13,259
|
|
|
$
|
3,804
|
|
Principal payments on long-term debt
|
505,988
|
|
|
5,150
|
|
|
10,300
|
|
|
10,300
|
|
|
480,238
|
|
|||||
Interest on long-term debt and ABL Facility fees
|
113,055
|
|
|
22,603
|
|
|
44,548
|
|
|
42,049
|
|
|
3,855
|
|
|||||
Purchase obligations
(2)
|
125,925
|
|
|
125,925
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
836,384
|
|
|
$
|
182,331
|
|
|
$
|
100,548
|
|
|
$
|
65,608
|
|
|
$
|
487,897
|
|
(in thousands except per share data)
|
|
2015
|
|
2014
|
|
2013
|
||||||
REVENUES
|
|
|
|
|
|
|
||||||
Net revenue:
|
|
$
|
1,419,778
|
|
|
$
|
1,555,353
|
|
|
$
|
1,562,876
|
|
Cost of sales (excluding depreciation and amortization)
|
|
767,189
|
|
|
819,422
|
|
|
852,539
|
|
|||
Gross profit
|
|
652,589
|
|
|
735,931
|
|
|
710,337
|
|
|||
|
|
|
|
|
|
|
||||||
Selling and administrative
|
|
545,301
|
|
|
573,335
|
|
|
560,327
|
|
|||
Depreciation and amortization
|
|
17,399
|
|
|
19,703
|
|
|
21,599
|
|
|||
Intangible asset impairment
|
|
98,300
|
|
|
—
|
|
|
—
|
|
|||
Other operating (income) expense, net
|
|
(3,327
|
)
|
|
3,250
|
|
|
70
|
|
|||
Total costs and expenses
|
|
657,673
|
|
|
596,288
|
|
|
581,996
|
|
|||
Operating (loss) income
|
|
(5,084
|
)
|
|
139,643
|
|
|
128,341
|
|
|||
Interest expense
|
|
24,826
|
|
|
20,494
|
|
|
—
|
|
|||
Other income, net
|
|
(671
|
)
|
|
(1,408
|
)
|
|
(50
|
)
|
|||
(Loss) income before income taxes
|
|
(29,239
|
)
|
|
120,557
|
|
|
128,391
|
|
|||
Income tax (benefit) expense
|
|
(9,691
|
)
|
|
46,758
|
|
|
49,544
|
|
|||
NET (LOSS) INCOME
|
|
$
|
(19,548
|
)
|
|
$
|
73,799
|
|
|
$
|
78,847
|
|
NET (LOSS) INCOME PER COMMON SHARE ATTRIBUTABLE TO STOCKHOLDERS (Note 2)
|
|
|
|
|
|
|
||||||
Basic:
|
|
$
|
(0.61
|
)
|
|
$
|
2.31
|
|
|
$
|
2.47
|
|
Diluted:
|
|
$
|
(0.61
|
)
|
|
$
|
2.31
|
|
|
$
|
2.47
|
|
|
|
|
|
|
|
|
||||||
Basic weighted average common shares outstanding
|
|
31,979
|
|
|
31,957
|
|
|
31,957
|
|
|||
Diluted weighted average common shares outstanding
|
|
31,979
|
|
|
32,016
|
|
|
31,957
|
|
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
NET (LOSS) INCOME
|
|
$
|
(19,548
|
)
|
|
$
|
73,799
|
|
|
$
|
78,847
|
|
Other comprehensive (loss) income, net of tax
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
(2,086
|
)
|
|
(5,303
|
)
|
|
1,166
|
|
|||
COMPREHENSIVE (LOSS) INCOME
|
|
$
|
(21,634
|
)
|
|
$
|
68,496
|
|
|
$
|
80,013
|
|
(in thousands, except share data)
|
|
January 29,
2016 |
|
January 30,
2015 |
||||
ASSETS
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
228,368
|
|
|
$
|
221,454
|
|
Restricted cash
|
|
3,300
|
|
|
3,300
|
|
||
Accounts receivable, net
|
|
32,061
|
|
|
30,073
|
|
||
Inventories, net
|
|
329,203
|
|
|
301,367
|
|
||
Prepaid expenses and other current assets
|
|
24,972
|
|
|
31,408
|
|
||
Total current assets
|
|
617,904
|
|
|
587,602
|
|
||
Property and equipment, net
|
|
109,831
|
|
|
101,223
|
|
||
Goodwill
|
|
110,000
|
|
|
110,000
|
|
||
Intangible assets, net
|
|
430,000
|
|
|
528,712
|
|
||
Other assets
|
|
20,791
|
|
|
22,462
|
|
||
TOTAL ASSETS
|
|
$
|
1,288,526
|
|
|
$
|
1,349,999
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
146,097
|
|
|
$
|
132,796
|
|
Other current liabilities
|
|
83,992
|
|
|
107,553
|
|
||
Total current liabilities
|
|
230,089
|
|
|
240,349
|
|
||
Long-term debt
|
|
500,838
|
|
|
505,988
|
|
||
Long-term deferred tax liabilities
|
|
157,252
|
|
|
181,045
|
|
||
Other liabilities
|
|
15,838
|
|
|
18,424
|
|
||
TOTAL LIABILITIES
|
|
904,017
|
|
|
945,806
|
|
||
Commitments and contingencies
|
|
|
|
|
||||
STOCKHOLDERS' EQUITY
|
|
|
|
|
||||
Common stock, par value $0.01- authorized: 480,000,000 shares; issued and outstanding: 31,991,668, 31,956,521, respectively
|
|
320
|
|
|
320
|
|
||
Additional paid-in capital
|
|
344,244
|
|
|
342,294
|
|
||
Retained earnings
|
|
49,329
|
|
|
68,877
|
|
||
Accumulated other comprehensive loss
|
|
(9,384
|
)
|
|
(7,298
|
)
|
||
Total stockholders’ equity
|
|
384,509
|
|
|
404,193
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$
|
1,288,526
|
|
|
$
|
1,349,999
|
|
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
||||||
Net (loss) income
|
|
$
|
(19,548
|
)
|
|
$
|
73,799
|
|
|
$
|
78,847
|
|
Adjustments to reconcile net (loss) income to net cash used in operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
17,399
|
|
|
19,703
|
|
|
21,599
|
|
|||
Intangible asset impairment
|
|
98,300
|
|
|
—
|
|
|
—
|
|
|||
Product recall
|
|
(3,371
|
)
|
|
4,713
|
|
|
—
|
|
|||
Amortization of debt issuance costs
|
|
1,741
|
|
|
1,563
|
|
|
—
|
|
|||
Loss on disposal of property and equipment
|
|
44
|
|
|
239
|
|
|
70
|
|
|||
Stock-based compensation
|
|
2,395
|
|
|
2,118
|
|
|
—
|
|
|||
Deferred income taxes
|
|
(22,670
|
)
|
|
17,545
|
|
|
(4,961
|
)
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Inventories
|
|
(29,819
|
)
|
|
64,252
|
|
|
10,007
|
|
|||
Accounts payable
|
|
10,005
|
|
|
19,207
|
|
|
9,145
|
|
|||
Other operating assets
|
|
3,462
|
|
|
(9,342
|
)
|
|
(3,946
|
)
|
|||
Other operating liabilities
|
|
(22,047
|
)
|
|
17,324
|
|
|
4,158
|
|
|||
Net cash provided by operating activities
|
|
35,891
|
|
|
211,121
|
|
|
114,919
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
||||||
Proceeds from sale of property and equipment
|
|
—
|
|
|
—
|
|
|
14
|
|
|||
Purchases of property and equipment
|
|
(22,224
|
)
|
|
(16,608
|
)
|
|
(9,887
|
)
|
|||
Net cash used in investing activities
|
|
(22,224
|
)
|
|
(16,608
|
)
|
|
(9,873
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
||||||
Contributions from / (distributions to) Sears Holdings, net
|
|
—
|
|
|
8,481
|
|
|
(110,936
|
)
|
|||
Proceeds from issuance of long-term debt
|
|
—
|
|
|
515,000
|
|
|
—
|
|
|||
Payments on term loan facility
|
|
(5,150
|
)
|
|
(3,862
|
)
|
|
—
|
|
|||
Debt issuance costs
|
|
—
|
|
|
(11,433
|
)
|
|
—
|
|
|||
Dividend paid to a subsidiary of Sears Holdings Corporation
|
|
—
|
|
|
(500,000
|
)
|
|
—
|
|
|||
Net cash (used in) provided by financing activities
|
|
(5,150
|
)
|
|
8,186
|
|
|
(110,936
|
)
|
|||
Effects of exchange rate changes on cash
|
|
(1,603
|
)
|
|
(3,656
|
)
|
|
44
|
|
|||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
6,914
|
|
|
199,043
|
|
|
(5,846
|
)
|
|||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
|
221,454
|
|
|
22,411
|
|
|
28,257
|
|
|||
CASH AND CASH EQUIVALENTS, END OF YEAR
|
|
$
|
228,368
|
|
|
$
|
221,454
|
|
|
$
|
22,411
|
|
SUPPLEMENTAL INFORMATION:
|
|
|
|
|
|
|
||||||
Supplemental Cash Flow Data:
|
|
|
|
|
|
|
||||||
Unpaid liability to acquire property and equipment
|
|
$
|
8,182
|
|
|
$
|
4,157
|
|
|
$
|
2,208
|
|
Income taxes paid
|
|
$
|
23,991
|
|
|
$
|
19,842
|
|
|
$
|
4,059
|
|
Interest paid
|
|
$
|
22,690
|
|
|
$
|
18,726
|
|
|
$
|
—
|
|
|
Common Stock Issued
|
|
Additional Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Net Parent Company Investment
|
|
Total Stockholders' Equity
|
|||||||||||||||
(in thousands except share data)
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||
Balance at February 1, 2013
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3,161
|
)
|
|
$
|
826,398
|
|
|
$
|
823,237
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78,847
|
|
|
78,847
|
|
||||||
Cumulative translation adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,166
|
|
|
—
|
|
|
1,166
|
|
||||||
Distribution to Sears Holdings, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(110,936
|
)
|
|
(110,936
|
)
|
||||||
Balance at January 31, 2014
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,995
|
)
|
|
794,309
|
|
|
792,314
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
68,877
|
|
|
—
|
|
|
4,922
|
|
|
73,799
|
|
||||||
Cumulative translation adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,303
|
)
|
|
—
|
|
|
(5,303
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
2,118
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,118
|
|
||||||
Contribution from Sears Holdings, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,481
|
|
|
8,481
|
|
||||||
Dividend paid to parent company
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(500,000
|
)
|
|
(500,000
|
)
|
||||||
Separation related adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,784
|
|
|
32,784
|
|
||||||
Reclassification of net parent company investment to common stock and additional paid-in capital in conjunction with the separation
|
31,956,521
|
|
|
320
|
|
|
340,176
|
|
|
—
|
|
|
—
|
|
|
(340,496
|
)
|
|
—
|
|
||||||
Balance at January 30, 2015
|
31,956,521
|
|
|
320
|
|
|
342,294
|
|
|
68,877
|
|
|
(7,298
|
)
|
|
—
|
|
|
404,193
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,548
|
)
|
|
—
|
|
|
—
|
|
|
(19,548
|
)
|
||||||
Cumulative translation adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,086
|
)
|
|
—
|
|
|
(2,086
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
2,395
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,395
|
|
||||||
Vesting of restricted shares
|
52,948
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Restricted stock shares surrendered for taxes
|
(17,801
|
)
|
|
—
|
|
|
(445
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(445
|
)
|
||||||
Balance at January 29, 2016
|
31,991,668
|
|
|
$
|
320
|
|
|
$
|
344,244
|
|
|
$
|
49,329
|
|
|
$
|
(9,384
|
)
|
|
$
|
—
|
|
|
$
|
384,509
|
|
Fiscal Year
|
|
Ended
|
|
Weeks
|
|
2015
|
|
January 29, 2016
|
|
52
|
|
2014
|
|
January 30, 2015
|
|
52
|
|
2013
|
|
January 31, 2014
|
|
52
|
|
(in thousands)
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Beginning balance
|
$
|
688
|
|
|
$
|
1,031
|
|
|
$
|
1,316
|
|
Provision
|
286
|
|
|
371
|
|
|
444
|
|
|||
Write-offs
|
(348
|
)
|
|
(714
|
)
|
|
(729
|
)
|
|||
Ending balance
|
$
|
626
|
|
|
$
|
688
|
|
|
$
|
1,031
|
|
(in thousands)
|
Asset Lives
|
|
January 29, 2016
|
|
January 30, 2015
|
||||
Land
|
—
|
|
$
|
3,509
|
|
|
$
|
3,529
|
|
Buildings and improvements
|
15-30
|
|
99,957
|
|
|
100,583
|
|
||
Furniture, fixtures and equipment
|
3-10
|
|
78,864
|
|
|
76,938
|
|
||
Computer hardware and software
|
3-5
|
|
75,170
|
|
|
67,432
|
|
||
Leasehold improvements
|
3-7
|
|
12,841
|
|
|
12,781
|
|
||
Assets in development
|
|
|
17,020
|
|
|
5,630
|
|
||
Gross property and equipment
|
|
|
287,361
|
|
|
266,893
|
|
||
Accumulated depreciation
|
|
|
(177,530
|
)
|
|
(165,670
|
)
|
||
Total property and equipment, net
|
|
|
$
|
109,831
|
|
|
$
|
101,223
|
|
(in thousands)
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Beginning balance
|
$
|
13,868
|
|
|
$
|
13,805
|
|
|
$
|
13,524
|
|
Provision
|
166,579
|
|
|
187,000
|
|
|
211,505
|
|
|||
Write-offs
|
(167,842
|
)
|
|
(186,937
|
)
|
|
(211,224
|
)
|
|||
Ending balance
|
$
|
12,605
|
|
|
$
|
13,868
|
|
|
$
|
13,805
|
|
(in thousands)
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Beginning balance: Accumulated other comprehensive loss (net of tax of $3,931, $1,211 and $1,938, respectively)
|
|
$
|
(7,298
|
)
|
|
$
|
(1,995
|
)
|
|
$
|
(3,161
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments (net of tax (expense) benefit of $1,122, $2,720, and $(727), respectively)
|
|
(2,086
|
)
|
|
(5,303
|
)
|
|
1,166
|
|
|||
Ending balance: Accumulated other comprehensive loss (net of tax of $5,053, $3,931, and $1,211, respectively)
|
|
$
|
(9,384
|
)
|
|
$
|
(7,298
|
)
|
|
$
|
(1,995
|
)
|
(in thousands, except per share amounts)
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Net (loss) income
|
|
$
|
(19,548
|
)
|
|
$
|
73,799
|
|
|
$
|
78,847
|
|
|
|
|
|
|
|
|
||||||
Basic weighted average shares outstanding
|
|
31,979
|
|
|
31,957
|
|
|
31,957
|
|
|||
Dilutive effect of stock awards
|
|
—
|
|
|
59
|
|
|
—
|
|
|||
Diluted weighted average shares outstanding
|
|
$
|
31,979
|
|
|
$
|
32,016
|
|
|
$
|
31,957
|
|
|
|
|
|
|
|
|
||||||
Basic (loss) earnings per share
|
|
$
|
(0.61
|
)
|
|
$
|
2.31
|
|
|
$
|
2.47
|
|
Diluted (loss) earnings per share
|
|
$
|
(0.61
|
)
|
|
$
|
2.31
|
|
|
$
|
2.47
|
|
|
|
January 29, 2016
|
|
January 30, 2015
|
||||||||||
|
|
Principal Amount
|
|
Interest Rate
|
|
Principal Amount
|
|
Interest Rate
|
||||||
Term Loan Facility, maturing April 4, 2021
|
|
$
|
505,988
|
|
|
4.25
|
%
|
|
$
|
511,138
|
|
|
4.25
|
%
|
ABL Facility, maturing April 4, 2019
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
|
|
505,988
|
|
|
|
|
511,138
|
|
|
|
||||
Less: current maturities in Other current liabilities
|
|
5,150
|
|
|
|
|
5,150
|
|
|
|
||||
Long-term debt
|
|
$
|
500,838
|
|
|
|
|
$
|
505,988
|
|
|
|
|
|
January 29, 2016
|
|
January 30, 2015
|
||||
ABL maximum borrowing
|
|
$
|
175,000
|
|
|
$
|
175,000
|
|
Outstanding letters of credit
|
|
24,311
|
|
|
15,541
|
|
||
Borrowing availability under ABL
|
|
$
|
150,689
|
|
|
$
|
159,459
|
|
2016
|
$
|
28,653
|
|
2017
|
27,302
|
|
|
2018
|
18,398
|
|
|
2019
|
11,845
|
|
|
2020
|
1,414
|
|
|
Thereafter
|
3,804
|
|
(in thousands)
|
Fiscal 2015
|
Fiscal 2014
|
||||
Performance Awards
|
$
|
861
|
|
$
|
1,883
|
|
Deferred Awards
|
1,534
|
|
235
|
|
||
Total stock-based compensation expense
|
$
|
2,395
|
|
$
|
2,118
|
|
(in thousands, except per share amounts)
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Unvested Deferred Awards, as of January 31, 2014
|
—
|
|
|
$
|
—
|
|
Granted
|
47
|
|
|
27.86
|
|
|
Forfeited
|
(3
|
)
|
|
27.58
|
|
|
Unvested Deferred Awards, as of January 30, 2015
|
44
|
|
|
$
|
28.01
|
|
Granted
|
165
|
|
|
31.20
|
|
|
Vested
|
(9
|
)
|
|
28.02
|
|
|
Forfeited
|
(25
|
)
|
|
28.74
|
|
|
Unvested Deferred Awards, as of January 29, 2016
|
175
|
|
|
$
|
30.87
|
|
(in thousands, except per share amounts)
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Unvested Deferred Awards, as of January 31, 2014
|
—
|
|
|
$
|
—
|
|
Granted
|
304
|
|
|
27.56
|
|
|
Forfeited
|
(107
|
)
|
|
26.73
|
|
|
Unvested Deferred Awards, as of January 30, 2015
|
197
|
|
|
$
|
28.01
|
|
Granted
|
19
|
|
|
21.94
|
|
|
Vested
|
(43
|
)
|
|
27.86
|
|
|
Forfeited
|
(64
|
)
|
|
28.34
|
|
|
Unvested Performance Awards, as of January 29, 2016
|
109
|
|
|
$
|
26.81
|
|
(in thousands)
|
January 29, 2016
|
|
January 30, 2015
|
||||
Deferred gift card revenue
|
$
|
20,802
|
|
|
$
|
23,025
|
|
Accrued employee compensation and benefits
|
12,785
|
|
|
18,778
|
|
||
Reserve for sales returns and allowances
|
12,605
|
|
|
13,868
|
|
||
Deferred revenue
|
11,097
|
|
|
11,228
|
|
||
Accrued property, sales and other taxes
|
7,536
|
|
|
8,194
|
|
||
Short-term portion of long-term debt
|
5,150
|
|
|
5,150
|
|
||
Product recall
|
207
|
|
|
4,406
|
|
||
Income taxes payable
|
—
|
|
|
9,559
|
|
||
Other
|
13,810
|
|
|
13,345
|
|
||
Total other current liabilities
|
$
|
83,992
|
|
|
$
|
107,553
|
|
|
|
January 29, 2016
|
|
January 30, 2015
|
||||||||||||
(in thousands)
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount |
|
Fair
Value |
||||||||
Long-term debt, including short-term portion
|
|
$
|
505,988
|
|
|
$
|
418,073
|
|
|
$
|
511,138
|
|
|
$
|
491,331
|
|
|
|
January 29, 2016
|
January 30, 2015
|
|||||||
(in thousands)
|
|
Useful Life
|
|
|
|
|
||||
Amortizing intangible assets:
|
|
|
|
|
|
|
||||
Gross Customer lists
|
|
10
|
|
$
|
26,300
|
|
|
$
|
26,300
|
|
Accumulated Amortization
|
|
|
|
(26,300
|
)
|
|
(25,888
|
)
|
||
Net Customer lists
|
|
|
|
—
|
|
|
412
|
|
||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
||||
Gross Trade Names
|
|
|
|
528,300
|
|
|
528,300
|
|
||
Impairments
|
|
|
|
(98,300
|
)
|
|
—
|
|
||
Net Trade Names
|
|
|
|
430,000
|
|
|
528,300
|
|
||
Total intangible assets, net
|
|
|
|
$
|
430,000
|
|
|
$
|
528,712
|
|
Goodwill
|
|
|
|
$
|
110,000
|
|
|
$
|
110,000
|
|
(in thousands)
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
(Loss) income before income taxes:
|
|
|
|
|
|
||||||
United States
|
$
|
(31,206
|
)
|
|
$
|
114,772
|
|
|
$
|
117,318
|
|
Foreign
|
1,967
|
|
|
5,785
|
|
|
11,073
|
|
|||
Total (loss) income before income taxes
|
$
|
(29,239
|
)
|
|
$
|
120,557
|
|
|
$
|
128,391
|
|
(in thousands)
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
United States
|
$
|
(9,737
|
)
|
|
$
|
44,503
|
|
|
$
|
46,272
|
|
Foreign
|
46
|
|
|
2,255
|
|
|
3,272
|
|
|||
Total (benefit) provision
|
$
|
(9,691
|
)
|
|
$
|
46,758
|
|
|
$
|
49,544
|
|
(in thousands)
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
10,524
|
|
|
$
|
20,902
|
|
|
$
|
46,355
|
|
State
|
2,409
|
|
|
6,361
|
|
|
5,631
|
|
|||
Foreign
|
46
|
|
|
1,950
|
|
|
2,519
|
|
|||
Total current
|
12,979
|
|
|
29,213
|
|
|
54,505
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(20,956
|
)
|
|
14,579
|
|
|
(4,238
|
)
|
|||
State
|
(1,714
|
)
|
|
2,661
|
|
|
(426
|
)
|
|||
Foreign
|
—
|
|
|
305
|
|
|
(297
|
)
|
|||
Total deferred
|
(22,670
|
)
|
|
17,545
|
|
|
(4,961
|
)
|
|||
Total (benefit) provision
|
$
|
(9,691
|
)
|
|
$
|
46,758
|
|
|
$
|
49,544
|
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
|||
Tax at statutory federal tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal tax benefit
|
(1.6
|
)%
|
|
2.9
|
%
|
|
2.6
|
%
|
Other, net
|
(0.3
|
)%
|
|
0.9
|
%
|
|
1.0
|
%
|
Total
|
33.1
|
%
|
|
38.8
|
%
|
|
38.6
|
%
|
(in thousands)
|
January 29,
2016 |
|
January 30,
2015 |
||||
Deferred tax assets:
|
|
|
|
||||
Deferred revenue
|
$
|
5,349
|
|
|
$
|
7,894
|
|
Credit carryforwards
|
—
|
|
|
5,964
|
|
||
Product recall and other reserves
|
1,839
|
|
|
5,253
|
|
||
Deferred compensation
|
3,199
|
|
|
4,823
|
|
||
Reserve for returns
|
4,911
|
|
|
4,695
|
|
||
Inventory
|
4,231
|
|
|
4,822
|
|
||
Currency translation adjustment - foreign subsidiaries
|
5,053
|
|
|
3,931
|
|
||
Other
|
6,935
|
|
|
7,518
|
|
||
Total deferred tax assets
|
31,517
|
|
|
44,900
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Intangible assets
|
161,503
|
|
|
197,786
|
|
||
LIFO reserve
|
20,153
|
|
|
19,864
|
|
||
Unremitted foreign earnings
|
5,722
|
|
|
4,782
|
|
||
Catalog marketing
|
1,390
|
|
|
3,474
|
|
||
Other
|
—
|
|
|
39
|
|
||
Total deferred tax liabilities
|
188,768
|
|
|
225,945
|
|
||
Net deferred tax liability
|
$
|
157,251
|
|
|
$
|
181,045
|
|
|
Federal, State and Foreign Tax
|
||||||||||
(in thousands)
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Gross UTB balance at beginning of period
|
$
|
9,082
|
|
|
$
|
8,718
|
|
|
$
|
8,507
|
|
Tax positions related to the current period—gross increases
|
116
|
|
|
364
|
|
|
252
|
|
|||
Tax positions related to the prior periods—gross decreases
|
(697
|
)
|
|
—
|
|
|
(41
|
)
|
|||
Settlements
|
(190
|
)
|
|
—
|
|
|
—
|
|
|||
Gross UTB balance at end of period
|
$
|
8,311
|
|
|
$
|
9,082
|
|
|
$
|
8,718
|
|
(in thousands)
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Retail services, store labor
|
|
$
|
26,773
|
|
|
$
|
31,087
|
|
|
$
|
34,495
|
|
Rent, CAM and occupancy costs
|
|
25,239
|
|
|
26,605
|
|
|
28,021
|
|
|||
Financial services and payment processing
|
|
2,792
|
|
|
3,034
|
|
|
3,353
|
|
|||
Supply chain costs
|
|
985
|
|
|
1,044
|
|
|
2,037
|
|
|||
Total expenses
|
|
$
|
55,789
|
|
|
$
|
61,770
|
|
|
$
|
67,906
|
|
Number of Lands’ End Shops at Sears at period end
(1)
|
|
227
|
|
|
236
|
|
|
274
|
|
(in thousands)
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Sourcing
|
|
$
|
9,609
|
|
|
$
|
8,986
|
|
|
$
|
9,805
|
|
Shop Your Way
|
|
2,896
|
|
|
4,202
|
|
|
8,788
|
|
|||
Shared services
|
|
484
|
|
|
559
|
|
|
442
|
|
|||
Co-location and services
|
|
—
|
|
|
15
|
|
|
26
|
|
|||
Total expenses
|
|
$
|
12,989
|
|
|
$
|
13,762
|
|
|
$
|
19,061
|
|
(in thousands)
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Call center services
|
|
$
|
2,344
|
|
|
$
|
2,346
|
|
|
$
|
1,505
|
|
Lands' End business outfitters revenue
|
|
1,398
|
|
|
1,995
|
|
|
1,808
|
|
|||
Credit card revenue
|
|
1,274
|
|
|
1,519
|
|
|
1,276
|
|
|||
Royalty income
|
|
220
|
|
|
79
|
|
|
92
|
|
|||
Gift card revenue (expense)
|
|
(33
|
)
|
|
239
|
|
|
1,515
|
|
|||
Total
|
|
$
|
5,203
|
|
|
$
|
6,178
|
|
|
$
|
6,196
|
|
(in thousands)
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Net revenue:
|
|
|
|
|
|
|
||||||
Apparel
|
|
$
|
1,156,047
|
|
|
$
|
1,248,847
|
|
|
$
|
1,245,670
|
|
Non-apparel
|
|
183,073
|
|
|
220,385
|
|
|
226,302
|
|
|||
Services and other
|
|
80,658
|
|
|
86,121
|
|
|
90,904
|
|
|||
Total net revenue
|
|
$
|
1,419,778
|
|
|
$
|
1,555,353
|
|
|
$
|
1,562,876
|
|
•
|
The Direct segment sells products through the Company’s e-commerce websites and direct mail catalogs. Operating costs consist primarily of direct marketing costs (catalog and e-commerce marketing costs); order processing and shipping costs; direct labor and benefits costs and facility costs. Assets primarily include goodwill and trade name intangible assets, inventory, accounts receivable, prepaid expenses (deferred catalog costs), technology infrastructure, and property and equipment.
|
•
|
The Retail segment sells products and services through dedicated Lands’ End Shops at Sears across the United States, the Company’s stand-alone Lands’ End Inlet stores and international shop-in-shops. Operating costs consist primarily of labor and benefits costs; rent, CAM and occupancy costs; distribution costs; and in-store marketing costs. Assets primarily include inventory in the retail stores, fixtures and leasehold improvements.
|
•
|
Corporate overhead and other expenses include unallocated shared-service costs, which primarily consist of employee services and financial services, legal and corporate expenses. These expenses include labor and benefits costs, corporate headquarters occupancy costs and other administrative expenses. Assets include corporate headquarters and facilities, corporate cash and cash equivalents and deferred income taxes.
|
(in thousands)
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Net revenue:
|
|
|
|
|
|
|
||||||
Direct
|
|
$
|
1,214,993
|
|
|
$
|
1,320,642
|
|
|
$
|
1,303,862
|
|
Retail
|
|
204,566
|
|
|
234,632
|
|
|
258,922
|
|
|||
Corporate/ other
|
|
219
|
|
|
79
|
|
|
92
|
|
|||
Total net revenue
|
|
$
|
1,419,778
|
|
|
$
|
1,555,353
|
|
|
$
|
1,562,876
|
|
(in thousands)
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Adjusted EBITDA:
|
|
|
|
|
|
|
||||||
Direct
|
|
$
|
141,936
|
|
|
$
|
192,763
|
|
|
$
|
166,313
|
|
Retail
|
|
(520
|
)
|
|
7,161
|
|
|
4,665
|
|
|||
Corporate/ other
|
|
(34,128
|
)
|
|
(35,626
|
)
|
|
(20,968
|
)
|
|||
Total adjusted EBITDA
|
|
$
|
107,288
|
|
|
$
|
164,298
|
|
|
$
|
150,010
|
|
(in thousands)
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Depreciation and amortization:
|
|
|
|
|
|
|
||||||
Direct
|
|
$
|
13,916
|
|
|
$
|
15,640
|
|
|
$
|
16,691
|
|
Retail
|
|
2,029
|
|
|
2,618
|
|
|
3,547
|
|
|||
Corporate/ other
|
|
1,454
|
|
|
1,445
|
|
|
1,361
|
|
|||
Total depreciation and amortization
|
|
$
|
17,399
|
|
|
$
|
19,703
|
|
|
$
|
21,599
|
|
(in thousands)
|
|
January 29, 2016
|
|
January 30, 2015
|
||||
Total assets:
|
|
|
|
|
||||
Direct
|
|
$
|
953,502
|
|
|
$
|
1,019,926
|
|
Retail
|
|
69,321
|
|
|
67,765
|
|
||
Corporate/ other
|
|
265,703
|
|
|
262,308
|
|
||
Total assets
|
|
$
|
1,288,526
|
|
|
$
|
1,349,999
|
|
(in thousands)
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Capital expenditures:
|
|
|
|
|
|
|
||||||
Direct
|
|
$
|
21,630
|
|
|
$
|
15,160
|
|
|
$
|
9,057
|
|
Retail
|
|
318
|
|
|
1,004
|
|
|
260
|
|
|||
Corporate/ other
|
|
276
|
|
|
444
|
|
|
570
|
|
|||
Total capital expenditures
|
|
$
|
22,224
|
|
|
$
|
16,608
|
|
|
$
|
9,887
|
|
(in thousands)
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Net revenue:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
1,211,226
|
|
|
$
|
1,309,252
|
|
|
$
|
1,289,359
|
|
Europe
|
|
136,890
|
|
|
159,796
|
|
|
181,129
|
|
|||
Asia
|
|
51,808
|
|
|
56,014
|
|
|
54,948
|
|
|||
Other foreign
|
|
19,854
|
|
|
30,291
|
|
|
37,440
|
|
|||
Total net revenue
|
|
$
|
1,419,778
|
|
|
$
|
1,555,353
|
|
|
$
|
1,562,876
|
|
(in thousands)
|
|
January 29, 2016
|
|
January 30, 2015
|
||||
Property and equipment, net:
|
|
|
|
|
||||
United States
|
|
$
|
98,153
|
|
|
$
|
88,300
|
|
Europe
|
|
10,980
|
|
|
12,380
|
|
||
Asia
|
|
698
|
|
|
543
|
|
||
Total property and equipment, net
|
|
$
|
109,831
|
|
|
$
|
101,223
|
|
|
Fiscal 2015
|
||||||||||||||||||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||||||||||||||
(in thousands except share data)
|
$’s
|
|
% Net
Sales
|
|
$’s
|
|
% Net
Sales
|
|
$’s
|
|
% Net
Sales
|
|
$’s
|
|
% Net
Sales
|
||||||||||||
Net revenue
|
$
|
299,387
|
|
|
100.0
|
%
|
|
$
|
312,414
|
|
|
100.0
|
%
|
|
$
|
334,434
|
|
|
100.0
|
%
|
|
$
|
473,543
|
|
|
100.0
|
%
|
Gross profit
|
146,564
|
|
|
49.0
|
%
|
|
144,500
|
|
|
46.3
|
%
|
|
162,415
|
|
|
48.6
|
%
|
|
199,110
|
|
|
42.0
|
%
|
||||
Operating income (loss)
|
8,495
|
|
|
2.8
|
%
|
|
17,918
|
|
|
5.7
|
%
|
|
23,297
|
|
|
7.0
|
%
|
|
(54,794
|
)
|
|
(11.6
|
)%
|
||||
Net income (loss)
(3)
|
$
|
1,724
|
|
|
0.6
|
%
|
|
$
|
7,461
|
|
|
2.4
|
%
|
|
$
|
10,725
|
|
|
3.2
|
%
|
|
$
|
(39,458
|
)
|
|
(8.3
|
)%
|
Basic earnings (loss) per common share
|
$
|
0.05
|
|
|
|
|
$
|
0.23
|
|
|
|
|
$
|
0.34
|
|
|
|
|
$
|
(1.23
|
)
|
|
|
||||
Diluted earnings (loss) per common share
(2)
|
$
|
0.05
|
|
|
|
|
$
|
0.23
|
|
|
|
|
$
|
0.33
|
|
|
|
|
$
|
(1.23
|
)
|
|
|
|
Fiscal 2014
|
||||||||||||||||||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||||||||||||||
(in thousands except share data)
|
$’s
|
|
Net
Sales
|
|
$’s
|
|
Net
Sales
|
|
$’s
|
|
Net
Sales
|
|
$’s
|
|
Net
Sales
|
||||||||||||
Net revenue
|
$
|
330,483
|
|
|
100.0
|
%
|
|
$
|
347,222
|
|
|
100.0
|
%
|
|
$
|
373,082
|
|
|
100.0
|
%
|
|
$
|
504,566
|
|
|
100.0
|
%
|
Gross profit
|
162,022
|
|
|
49.0
|
%
|
|
168,406
|
|
|
48.5
|
%
|
|
183,295
|
|
|
49.1
|
%
|
|
222,208
|
|
|
44.0
|
%
|
||||
Operating income
|
18,794
|
|
|
5.7
|
%
|
|
25,298
|
|
|
7.3
|
%
|
|
35,098
|
|
|
9.4
|
%
|
|
60,453
|
|
|
12.0
|
%
|
||||
Net income
|
$
|
10,868
|
|
|
3.3
|
%
|
|
$
|
11,845
|
|
|
3.4
|
%
|
|
$
|
17,991
|
|
|
4.8
|
%
|
|
$
|
33,095
|
|
|
6.6
|
%
|
Basic earnings per common share
(1)
|
$
|
0.34
|
|
|
|
|
$
|
0.37
|
|
|
|
|
$
|
0.56
|
|
|
|
|
$
|
1.04
|
|
|
|
||||
Diluted earnings per common share
(1)(2)
|
$
|
0.34
|
|
|
|
|
$
|
0.37
|
|
|
|
|
$
|
0.56
|
|
|
|
|
$
|
1.03
|
|
|
|
(1)
|
For periods ended April 4, 2014 and prior, basic earnings per share are computed using
31,956,521
, the number of shares of Lands’ End common stock outstanding on April 4, 2014, the date on which the Lands’ End common stock was distributed to the stockholders of Sears Holdings Corporation. The same number of shares was used to calculate basic and diluted earnings per share for
Fiscal 2014
as there were
no
dilutive securities during these periods.
|
(2)
|
The sum of the quarterly earnings per share—basic and diluted amounts may not equal the fiscal year amount due to rounding.
|
(3)
|
Fourth Quarter 2015 Net loss includes an impairment charge of $98.3 million related to the non-cash write-down of our trade name asset, Lands' End.
|
Exhibit
Number
|
|
Exhibit Description
|
||
|
|
|
||
2.1
|
|
|
Separation and Distribution Agreement, dated as of April 4, 2014, by and between Sears Holdings Corporation and Lands’ End, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on April 8, 2014 (File No. 002-09769)).
|
|
3.1
|
|
|
Amended and Restated Certificate of Incorporation of Lands’ End, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on March 20, 2014 (File No. 001-09769)).
|
|
3.2
|
|
|
Amended and Restated Bylaws of Lands’ End, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on April 8, 2014 (File No. 001-09769)).
|
|
4.1
|
|
|
ABL Credit Agreement, dated as of April 4, 2014, by and between Lands’ End, Inc. (as the Domestic Borrower), Lands’ End Europe Limited (as the UK Borrower), Bank of America, N.A. (as Administrative Agent and Collateral Agent), the Other Lenders party thereto, Bank of America, N.A. and GE Capital Markets, Inc. (as Joint Lead Arrangers and Joint Bookrunners), General Electric Capital Corporation (as Syndication Agent) and Bank of Montreal (as Documentation Agent) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 8, 2014 (File No. 001-09769)).
|
|
4.2
|
|
|
Term Loan Credit Agreement, dated as of April 4, 2014, among Lands’ End, Inc. (as the Borrower), Bank of America, N.A. (as Administrative Agent and Collateral Agent and as Arranger and Bookrunner) and the Lenders party thereto (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on April 8, 2014 (File No. 001-09769)).
|
|
4.3
|
|
|
Guaranty and Security Agreement, dated as of April 4, 2014, among Lands’ End, Inc. (as Domestic Borrower) and certain of its wholly-owned subsidiaries, each as a Grantor, the other grantors from time to time party thereto and Bank of America, N.A., as Agent (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on April 8, 2014 (File No. 001-09769)).
|
|
4.4
|
|
|
Term Loan Guarantee and Security Agreement, dated as of April 4, 2014, among Lands’ End, Inc., as Borrower and certain of its wholly-owned subsidiaries, each as a Grantor, the other grantors from time to time party thereto and Bank of America, N.A., as Agent (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on April 8, 2014 (File No. 001-09769)).
|
|
10.1
|
|
|
Transition Services Agreement, dated as of April 4, 2014, by and between Sears Holdings Management Corporation and Lands’ End, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 8, 2014 (File No. 001-09769)).
|
|
10.2
|
|
|
Tax Sharing Agreement, dated as of April 4, 2014, by and between Sears Holdings Corporation and Lands’ End, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 8, 2014 (File No. 001-09769)).
|
|
10.3
|
|
|
Master Lease Agreement, dated as of April 4, 2014, by and between Sears, Roebuck and Co. and Lands’ End, Inc. (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 8, 2014 (File No. 001-09769)).
(1)
|
|
10.4
|
|
|
First Amendment to Master Lease Agreement, by and between Sears, Roebuck and Co. and Lands’ End, Inc., effective on July 6, 2015 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2015 (File No. 001-09769)).
(1)
|
|
10.5
|
|
|
Master Sublease Agreement, dated as of April 4, 2014, by and between Sears, Roebuck and Co. and Lands’ End, Inc. (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on April 8, 2014 (File No. 001-09769)).
(1)
|
10.6
|
|
|
First Amendment to Master Sublease Agreement, by and between Sears, Roebuck and Co. and Lands’ End, Inc., effective on July 6, 2015 (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2015 (File No. 001-09769)).
(1)
|
|
10.7
|
|
|
Lands’ End Shops at Sears Retail Operations Agreement, dated as of April 4, 2014, by and between Sears, Roebuck and Co. and Lands’ End, Inc. (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on April 8, 2014 (File No. 001-09769)).
|
|
10.8
|
|
|
Shop Your Way
SM
Retail Establishment Agreement, dated as of April 4, 2014, by and between Sears Holdings Management Corporation and Lands’ End, Inc. (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on April 8, 2014 (File No. 001-09769)).
(1)
|
|
10.9
|
|
|
Financial Services Agreement, dated as of April 4, 2014, by and between Sears Holdings Management Corporation and Lands’ End, Inc. (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on April 8, 2014 (File No. 001-09769)).
|
|
10.10
|
|
|
Buying Agency Agreement, dated as of April 4, 2014, by and between Sears Holdings Global Sourcing, Ltd. and Lands’ End, Inc. (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on April 8, 2014 (File No. 001-09769)).
|
|
*10.11
|
|
|
Director Compensation Policy effective as of December 23, 2015**
|
|
10.12
|
|
|
Lands’ End, Inc. Umbrella Incentive Program (As Amended and Restated) (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2015 (File No. 001-09769)).**
|
|
10.13
|
|
|
Lands’ End, Inc. 2014 Stock Plan (As Amended and Restated) (incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2015 (File No. 001-09769)).**
|
|
10.14
|
|
|
Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.25 to the Company’s Current Report on Form 8-K filed on May 27, 2014 (File No. 001-09769)).**
|
|
10.15
|
|
|
Form of Restricted Stock Unit Award Agreement (Timed-Based) (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on May 6, 2015 (File No. 001-09769)).**
|
|
10.16
|
|
|
Lands’ End, Inc. Annual Incentive Plan (As Amended and Restated) (incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2015 (File No. 001-09769)).**
|
|
10.17
|
|
|
2015 Additional Definitions Under Lands’ End, Inc. Annual Incentive Plan (As Amended and Restated) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 6, 2015 (File No. 001-09769)).**
|
|
10.18
|
|
|
Lands’ End, Inc. Long-Term Incentive Program (As Amended and Restated) (incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 20, 2015 (File No. 001-09769)).**
|
|
10.19
|
|
|
2015 Additional Definitions Under Lands’ End, Inc. Long-Term Incentive Program (As Amended and Restated) (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 6, 2015 (File No. 001-09769)).**
|
|
10.20
|
|
|
Lands’ End, Inc. Cash Long-Term Incentive Plan (As Amended and Restated) (incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2015 (File No. 001-09769)).**
|
|
10.21
|
|
|
Form of Lands’ End, Inc. Executive Severance Agreement (incorporated by reference to Exhibit 10.24 to the Company’s Current Report on Form 8-K/A filed on July 2, 2014 (File No. 001-09769)).**
(1)
|
10.22
|
|
|
Letter from Lands’ End, Inc. to Federica Marchionni relating to employment, dated January 30, 2015 (incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2015 (File No. 001-09769)).**
|
|
10.23
|
|
|
Executive Severance Agreement dated and effective as of January 30, 2015 between Lands’ End, Inc. and its affiliates and subsidiaries and Federica Marchionni (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2015 (File No. 001-09769)).**
(1)
|
|
10.24
|
|
|
Restricted Stock Unit Agreement dated and effective as of February 17, 2015 between Lands’ End, Inc. and Federica Marchionni (incorporated by reference to Exhibit 10.30 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2015 (File No. 001-09769)).
|
|
10.25
|
|
|
Letter from Sears Holdings Corporation to Edgar Huber relating to employment, dated July 18, 2011 (incorporated by reference to Exhibit 10.9 to the Company’s Form 10 (File No. 001-09769)).**
(1)
|
|
10.26
|
|
|
Executive Severance Agreement dated and effective as of December 5, 2014 between Lands’ End, Inc. and its affiliates and subsidiaries and Edgar Huber (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2015 (File No. 001-09769)).**
(1)
|
|
10.27
|
|
|
Letter from Lands’ End, Inc. to Edgar Huber, dated February 1, 2015 (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2015 (File No. 001-09769)).**
|
|
*10.28
|
|
|
Letter from Lands’ End, Inc. to James Gooch relating to employment, dated January 26, 2016 and effective as of January 27, 2016.**
|
|
*10.29
|
|
|
Executive Severance Agreement dated and effective as of January 27, 2016 between Lands’ End, Inc. and its affiliates and subsidiaries and James Gooch.**
(2)
|
|
*10.30
|
|
|
Restricted Stock Unit Agreement dated and effective as of January 27, 2016 between Lands’ End, Inc. and James Gooch.**
|
|
10.31
|
|
|
Letter from Lands’ End, Inc. to Michael Rosera relating to employment, dated June 27, 2012 (incorporated by reference to Exhibit 10.11 to the Company’s Form 10 (File No. 001-09769)).**
|
|
10.32
|
|
|
Executive Severance Agreement dated and effective as of December 5, 2014 between Lands’ End, Inc. and its affiliates and subsidiaries and Michael Rosera (incorporated by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2015 (File No. 001-09769)).**
(1)
|
|
10.33
|
|
|
Executive Severance Agreement dated and effective as of December 5, 2014 between Lands’ End, Inc. and its affiliates and subsidiaries and Kelly Ritchie (incorporated by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2015 (File No. 001-09769)).**
(1)
|
|
10.34
|
|
|
Letter from Lands’ End, Inc. to Steven G. Rado relating to employment, dated April 16, 2014 (incorporated by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2015 (File No. 001-09769)).**
|
|
10.35
|
|
|
Executive Severance Agreement dated and effective as of August 5, 2014 between Lands' End, Inc. and its affiliates and subsidiaries and Steven G. Rado (incorporated by reference to Exhibit 10.29 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2015 (File No. 001-09769)).**
(1)
|
|
*10.36
|
|
|
Letter from Lands’ End, Inc. to Scott Hyatt relating to employment, dated June 9, 2016.**
|
|
*10.37
|
|
|
Executive Severance Agreement dated and effective as of June 29, 2016 between Lands' End, Inc. and its affiliates and subsidiaries and Scott Hyatt.**
(2)
|
|
*21
|
|
|
Subsidiaries of Lands’ End, Inc.
|
|
*23
|
|
|
Consent of Deloitte & Touche LLP.
|
|
*24
|
|
|
Powers of Attorney.
|
|
*31.1
|
|
|
Certification of Chief Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
*31.2
|
|
|
Certification of Chief Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
*32
|
|
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
LANDS’ END, INC.
(Registrant)
|
|||
By:
|
/s/ James F. Gooch
|
|
|
Name:
|
James F. Gooch
|
|
|
Title:
|
Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer
|
|
|
Date:
|
April 1, 2016
|
|
Signature
|
|
Date
|
||||
/s/ Federica Marchionni
|
|
Director, President and Chief Executive Officer (principal executive officer)
|
|
April 1, 2016
|
||
Federica Marchionni
|
|
|
||||
|
|
|
|
|
||
/s/ James F. Gooch
|
|
Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer (principal financial officer)
|
|
April 1, 2016
|
||
James F. Gooch
|
|
|
||||
|
|
|
|
|
||
/s/ Bernard L. McCracken
|
|
Vice President and Chief Accounting Officer (principal accounting officer)
|
|
April 1, 2016
|
||
Bernard L. McCracken
|
|
|
||||
|
|
|
|
|
||
Josephine Linden*
|
|
Chairman of the Board of Directors
|
|
|
||
|
|
|
|
|
||
Robert Galvin*
|
|
Director
|
|
|
||
|
|
|
|
|
||
Elizabeth Darst Leykum*
|
|
Director
|
|
|
||
|
|
|
|
|
||
John T. McClain*
|
|
Director
|
|
|
||
|
|
|
|
|
||
Jignesh Patel*
|
|
Director
|
|
|
||
|
|
|
|
|
||
Jonah Staw*
|
|
Director
|
|
|
||
|
|
|
|
|
||
*By:
|
/s/ James F. Gooch
|
|
|
|
||
|
James F. Gooch
|
|
|
|
||
|
Attorney-in Fact
|
|
|
|
||
|
April 1, 2016
|
|
|
|
1.
|
Compensation
|
2.
|
Health Care Programs
|
3.
|
Expense Reimbursement
|
•
|
Annual base salary at a rate of $625,000. Your annual base salary shall be subject to review by the Compensation Committee of the Board of Directors of Lands’ End (the “
Committee
”) for increase, but not decrease.
|
•
|
Participation in the Lands’ End Annual Incentive Plan (“
AIP
”) with an annual incentive target opportunity of 75% of your base salary. Notwithstanding the foregoing, for Lands’ End’s fiscal year beginning February of 2016, you will receive an incentive payment equal to the greater of (a) the actual incentive earned and payable to you under the AIP in respect of such fiscal year and (b) upon the achievement of threshold performance targets required to satisfy the tax deductibility requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended, $312,500 (“
2016 Special Incentive Award
”). Any incentive award payable with respect to a fiscal year (including the 2016 Special Incentive Award) will be paid by April 15 of the following fiscal year, provided that you are actively employed at the payment date or your employment with Lands’ End terminates following the end of the applicable fiscal year and prior to payment by (x) Lands’ End without Cause (as defined in the Executive Severance Agreement), (y) by you for Good Reason (as defined in the Executive Severance Agreement) or (z) as a result of your death or Disability (as defined in the Executive Severance Agreement).
|
•
|
You will receive a one-time cash sign-on bonus of $350,000 (“
Sign-On Bonus
”). 50% of the Sign-On Bonus will be paid on your Start Date and 50% will be paid on the first anniversary of your Start Date. If your employment is terminated by Lands’ End for Cause (as defined in the Executive Severance Agreement) or by you without Good Reason (as defined in the Executive Severance Agreement) prior to the second anniversary of your Start Date, within 30 days of your last day worked, you will be required to pay back the pre-tax amount of the Sign-On Bonus paid to you within the 365 days immediately preceding the date your employment is terminated. For the avoidance of doubt, you shall not have to return any such amounts if your employment terminates by Lands’ End without Cause, by you for Good Reason or as a result of your death or Disability (as defined in the Executive Severance Agreement.
|
•
|
On or promptly following your Start Date, you will receive a one-time sign-on grant of restricted stock units (“
RSUs
”) valued, as of the grant date, at $350,000 (the “
Sign-On Service-Vesting RSUs
”) and a one-time sign-on grant of RSUs valued, as of the grant date, at $415,000 (the “
Sign-On Performance-Vesting RSUs
”), collectively referred to herein with the Sign-On Service-Vesting RSUs as the “
Sign-On RSUs
”)
,
in each case,
pursuant to the form of restricted stock unit award agreement approved by the Committee , under the Lands’ End, Inc. 2014 Stock Plan (As Amended and Restated) (the “
2014 Plan
”). The number of Sign-On RSUs granted will be determined using the market closing price of Lands’ End shares on the grant date of the awards. Any Sign-On RSUs that vest will be settled within thirty (30) days after the applicable vesting date by delivery of one share of Lands’ End common stock for each RSU being settled. If your employment is terminated by Lands’ End for Cause or by you without Good Reason, all Sign-On RSUs that are unvested as of the date of such termination will be forfeited; provided, that, upon any other termination
|
•
|
The Sign-On Service-Vesting RSUs will be scheduled to vest on a graded basis, with 25% of the RSUs granted vesting on the second anniversary of the Start Date, 25% of the RSUs granted vesting on the third anniversary of the Start Date, and 50% of the RSUs granted vesting on the fourth anniversary of the Start Date.
|
•
|
The Sign-On Performance-Vesting RSUs will vest subject to Lands’ End’s achievement of applicable performance targets over the fiscal years ending in calendar years 2017 and 2018. The applicable performance targets will be as established by the Committee based on the performance targets applicable to the Lands’ End 2015 LTIP program.
|
•
|
Your eligibility to participate in future long-term compensation programs of Lands’ End, beginning with the fiscal year beginning in calendar year 2016, will be determined at the same time and in the same manner as other senior executive officers of Lands’ End; provided, however, that your target award opportunity with respect to any given performance cycle will be not less than 100% of your annual base salary as in effect on the date of grant of any such award. Long-term compensation awards will be granted under the 2014 Plan (or a successor plan), in accordance with the terms thereof.
|
•
|
You will be eligible for relocation assistance in accordance with Lands’ End’s standard relocation policy. To receive relocation assistance, you must sign a Relocation Repayment Agreement, which will be included in the relocation package that will be sent to you from our relocation vendor. In addition, during the period from your Start Date through the 12-month anniversary thereof, Lands’ End will, upon presentation of appropriate documentation and subject to your continued employment, reimburse you for expenses (subject to an appropriate and reasonable cap) incurred by you in commuting between your current primary state of residence and Lands’ End headquarters (including but not limited to roundtrip airfare from your current location as of the date of this letter to Dodgeville, WI and rental car/ parking expenses), it being understood that you shall obtain permanent housing in the Dodgeville, Wisconsin area.
|
•
|
You will be eligible to receive at least four (4)
weeks paid vacation, in accordance with Lands’ End policy. Added to this, you will qualify for six (6) paid national holidays each year. You also will be eligible for up to four (4) personal days per year, after completing six (6) months of service.
|
•
|
You will be eligible to participate in all retirement, health and welfare programs of Lands’ End on a basis no less favorable than other senior executives of Lands’ End, in accordance with the applicable terms, conditions and availability of those programs. Lands’ End shall provide you with indemnification and advancement of expenses to the fullest extent permitted by applicable law and directors’ and officers’ liability insurance, each at the level provided to senior executives of Lands’ End.
|
•
|
Lands’ End will promptly pay or reimburse you for reasonable legal fees and expenses incurred by you in connection with the negotiation and drafting of this offer letter, not to exceed $17,500 in total.
|
•
|
All cash amounts referenced in this letter agreement are, unless otherwise expressly stated, subject to applicable income and employment tax withholding as required under applicable law.
|
•
|
Lands’ End and you agree that your workplace location will be at Lands’ End’s principal executive offices in Dodgeville, Wisconsin, subject to such business-related travel as may reasonably be required in order for you to perform your duties to Lands’ End. Lands’ End will reimburse you for all reasonable expenses incurred by you in the course of performing your duties with Lands’ End, subject to its requirements with respect to reporting and documentation of expenses under its expense reimbursement policy, including all travel, hotel and other expenses incurred by you in performing your duties.
|
Date: SAMPLE ONLY-DO NOT DATE
|
Signed by:
SAMPLE ONLY-DO NOT SIGN
Witness by:
SAMPLE ONLY-DO NOT SIGN
|
Name of Grantee:
|
|
James Gooch
|
|
(the “
Grantee
”)
|
|
No. of Restricted Stock Units:
|
|
18,916
|
|
(the “
Target Restricted Stock Units
”)
|
|
Issuance Date:
|
|
January 27, 2016
|
|
(the “
Issuance Date
”)
|
Performance Metric
|
Target
Opportunity
Weighting
|
Corporate Post-Incentive EBITDA (80% of Target Restricted Stock Units Opportunity)
|
|
Fiscal Year 2016
|
18%
|
Fiscal Year 2017
|
27%
|
2-Year Cumulative
|
35%
|
Non Retail Revenue (20% of Target Restricted Stock Units Opportunity)
|
|
Fiscal Year 2016
|
4%
|
Fiscal Year 2017
|
7%
|
2-Year Cumulative
|
9%
|
Total Target Restricted Stock Units Opportunity
|
100%
|
•
|
the effects of currency fluctuations in comparison to plan currency rates;
|
•
|
gains or losses from litigation, claim judgments, or regulatory proceedings including product recalls or legal and insurance settlements that, in each case, individually exceed $500,000;
|
•
|
the effect of changes in laws, regulations, or accounting principles, methods or estimates;
|
•
|
write down or impairment of assets;
|
•
|
the gain or loss from the sale or discontinuance of a business segment, division, or unit, and the planned, unrealized EBITDA for this business segment, division, or unit;
|
•
|
results from an unplanned acquired business and costs related to the unplanned acquisition;
|
•
|
restructuring and severance costs pursuant to a plan approved by the board and CEO;
|
•
|
the impact of the unplanned termination or loss of store leases; and
|
•
|
extraordinary items as defined by GAAP.
|
•
|
the effects of currency fluctuations in comparison to plan currency rates;
|
•
|
gains or losses from litigation, claim judgments, or regulatory proceedings including product recalls or legal and insurance settlements that, in each case, individually exceed $500,00;
|
•
|
the effect of changes in laws, regulations or accounting principles, methods or estimates;
|
•
|
revenue associated with sale or discontinuance of a business segment, division or unit;
|
•
|
extraordinary items as defined by GAAP;
|
•
|
The gain or loss from the sale or discontinuance of a business segment, division or unit and the planned, unrealized revenue for this business segment, division or unit; and
|
•
|
results from an unplanned acquired business.
|
COMPANY
|
||
|
||
LANDS’ END, INC.
|
||
|
|
|
By:
|
|
/s/ Kelly Ritchie 2-8-16
|
|
|
Name: Kelly Ritchie
|
|
|
Title: Senior Vice President, Employee and Customer Services
|
|
||
GRANTEE
|
||
|
|
|
By:
|
|
/s/ James Gooch
|
|
|
Name: James Gooch
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Start date of June 29, 2015
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Your offer is contingent upon a satisfactory completion of a criminal background check, employment authorization and verification and written confirmation, in a form acceptable to Lands’ End, that you are not subject to any restrictions arising out of your prior employment which would be breached or violated by your accepting a position with Lands’ End.
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Annual base salary of $550,000 paid in bi-weekly payments. Increases will be determined based on a number of factors, with your performance typically being the most significant factor. The first eligibility for a merit review would be with the fiscal 2016 cycle.
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Participation in the Lands’ End, Inc. Annual Incentive Bonus Plan (“AIP”) with an annual target incentive opportunity of 65% of your base salary which is $357,500 annualized. Your target incentive under the 2015 AIP will be prorated from your start date through January 29, 2016, the last day of Lands’ End’s 2015 fiscal year. Any incentive payable with respect to a fiscal year will be paid on or about April 15
th
of the following fiscal year, provided that you are actively employed at the payment date. The portion of the bonus target paid each year is based on your performance and the Company’s fiscal results. Further details regarding your 2015 AIP target award will be provided to you following your start date.
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You will be eligible to receive a Special Incentive Award with respect to Lands’ End’s 2015 fiscal year (payable on or about April 15
th
of the fiscal year following the applicable fiscal year), provided that you are actively employed on the payment date, subject to the following terms:
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2015 fiscal year: $125,000, 100% of which is subject to reduction by any amount payable to you under the 2015 AIP.
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Eligibility to participate in the Lands' End Retirement Plan includes a 401(k) contribution feature and currently includes a Company Match. Eligibility will start on the first calendar quarter following hire date. Lands’ End will begin matching contributions at 50% on the first 6% of eligible earnings, beginning with the first calendar quarter after completing a year of service and subject to the continued availability of the match under the plan.
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In recognition of your previous related experience, you will receive (4) weeks of vacation as of your start date.
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Subject to approval by the Compensation Committee of the Lands’ End Board of Directors, with this position, it is our intent to offer an annual long-term incentive with a target value of 100% of your base salary which is $550,000 annualized. The long-term incentive is proposed to include two components: 75% ($412,500) of the target value being Performance Cash under our Long-Term Incentive Program and 25% ($137,500) at grant date of the target value being time-vested Restricted Stock Units. Further details regarding the Fiscal 2015 LTI target award will be provided following approval by the Compensation Committee.
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As a condition of employment, you will be required to sign an Executive Severance Agreement (ESA). While the terms and conditions of the ESA will govern, here is a summary of some of the items covered by the ESA: If your employment with Lands’ End is terminated by LE (other than for Cause, death or Disability) or by you for Good Reason (as such capitalized terms are defined in the ESA), you will receive twelve (12) months
of salary continuation, equal to your base salary at the time of termination, reduced by any interim earnings you may otherwise receive. Under the ESA, you agree, among other things, not to disclose confidential information and, for eighteen (18) months following termination of employment, not to solicit our employees. You also agree not to aid, assist or render services for any ‘Lands’ End Competitor’ (as defined in the ESA) for twelve (12) months following termination of employment. The non-disclosure, non-solicitation and non-compete provisions apply regardless of whether you are eligible for severance benefits under the ESA.
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/s/ Kelly Ritchie
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/s/ Scott Hyatt
_____________________________
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Kelly Ritchie
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Scott Hyatt
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SVP - Employee Services
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Names
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State or Other Jurisdiction of Organization
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Lands’ End Canada Outfitters ULC
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Canada
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Lands’ End Direct Merchants, Inc.
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Delaware
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Lands’ End International, Inc.
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Delaware
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Lands’ End Europe Limited
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England & Wales
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Lands’ End GmbH
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Germany
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Lands’ End Japan, Inc.
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Delaware
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Lands’ End Japan, KK
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Japan
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Lands’ End Publishing, LLC
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Delaware
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LEGC, LLC
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Virginia
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Names
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Title
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/s/ Federica Marchionni
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Federica Marchionni
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Director, Chief Executive Officer and
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President
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(Principal Executive Officer)
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/s/ James F. Gooch
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James F. Gooch
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Executive Vice President, Chief
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Operating Officer, Chief Financial Officer and Treasurer
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(Principal Financial Officer)
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/s/ Bernard L. McCracken
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Bernard L. McCracken
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Vice President, Chief Accounting Officer
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(Principal Accounting Officer)
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/s/ Josephine Linden
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Josephine Linden
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Director and Chairman
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/s/ Robert Galvin
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Robert Galvin
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Director
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/s/ Elizabeth Darst Leykum
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Elizabeth Darst Leykum
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Director
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/s/ John T. McClain
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John T. McClain
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Director
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/s/ Jignesh Patel
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Jignesh Patel
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Director
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/s/ Jonah Staw
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Jonah Staw
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Director
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1.
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I have reviewed this annual report on Form 10-K of Lands’ End, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Federica Marchionni
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Federica Marchionni
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President and Chief Executive Officer
(Principal Executive Officer)
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Lands’ End, Inc.
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1.
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I have reviewed this annual report on Form 10-K of Lands’ End, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ James F. Gooch
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James F. Gooch
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Executive Vice President and Chief Operating Officer, Chief Financial Officer and Treasurer
(Principal Financial Officer)
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Lands’ End, Inc.
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Federica Marchionni
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Federica Marchionni
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President and Chief Executive Officer
(Principal Executive Officer)
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/s/ James F. Gooch
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James F. Gooch
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Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer
(Principal Financial Officer)
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