Lands’ End Announces New Term Loan
January 02 2024 - 8:30AM
Lands' End, Inc. (NASDAQ: LE) today announced that it has entered
into a new term loan of $260 million. The loan proceeds were used
to refinance the Company’s existing term loan well ahead of its
maturity in September 2025. The loan is secured by a first lien on
all non-ABL assets and a second lien on all ABL assets. Interest is
payable monthly at an initial rate of 8.25% per annum plus the
greater of SOFR or 2.0%. The initial rate is subject to a reduction
to 8.00% and 7.75% based on the Company’s debt and EBITDA levels.
Amortization is payable quarterly at 1.25% of original principal
amount. The loan matures in December 2028.
“The completion of this refinancing initiative is an important
step in Lands’ End’s trajectory and provides us with more favorable
terms under which we can continue to invest in the growth and
evolution of the Company,” said Bernard McCracken, Chief Financial
Officer. “Our performance in 2023 has been characterized by steady
improvements throughout the year –including expanding gross margin
by approximately 700 basis points and reducing our inventory
position year-over-year by 25% in the third quarter of 2023 – and
underpins our confidence in our ability to drive long-term
profitable growth.”
Andrew McLean, Chief Executive Officer, added, “On the heels of
our strong third quarter, it’s clear that Lands’ End’s
solutions-based strategy is delivering compelling results. Through
our focus on injecting newness across our assortment and reaching
new and prospective customers in the most impactful ways, which
collectively are helping us drive more profitable sales, we have
significantly improved our operating and financial position and
paved the way for sustainable growth. As we look to 2024 and
beyond, we plan to build on our progress by further enhancing
efficiency, reducing our costs and ensuring we are best positioned
to create value for our stakeholders over the long term.”
The Company was advised on the refinancing transaction by
Perella Weinberg Partners. The lending group includes Blue Torch
Capital, Sculptor Capital Management, JPMorgan and Arbour Lane
Capital Management.
About Lands'
End, Inc.Lands’ End, Inc.
(NASDAQ:LE) is a leading digital retailer of casual clothing,
swimwear, outerwear, accessories, footwear, home products and
uniform solutions. We offer products online at www.landsend.com,
through our own Company Operated stores and through third-party
distribution channels. We are a classic American lifestyle brand
with a passion for quality, legendary service and real value. We
seek to deliver timeless style for women, men, kids and the home.
We also offer products to businesses and schools, for their
employees and students, through the Outfitters distribution
channel.
Forward-Looking StatementsThis
press release contains forward-looking statements that involve
risks and uncertainties, including statements regarding the impact
of the financing terms on the Company’s ability to invest in growth
and further evolution of the Company; the Company’s confidence in
its ability to drive long-term profitable growth; expectations of
sustainable growth; and plans and expectations for enhancing
efficiency, reducing costs and positioning to create value for
stakeholders over the long term. The following important factors
and uncertainties, among others, could cause actual results to
differ materially from those described in these forward-looking
statements: global supply chain challenges in the recent past have
resulted in a significant increase in inbound transportation costs
and delays in receiving product; disruption in the Company’s supply
chain, including with respect to its distribution centers,
third-party manufacturing partners and logistics partners, caused
by limits in freight capacity, increases in transportation costs,
port congestion, other logistics constraints, and closure of
certain manufacturing facilities and production lines due to public
health crises and other global economic conditions; the impact of
global economic conditions, including inflation, on consumer
discretionary spending; the impact of public health crises on
operations, customer demand and the Company’s supply chain, as well
as its consolidated results of operation, financial position and
cash flows; the Company may be unsuccessful in implementing its
strategic initiatives, or its initiatives may not have their
desired impact on its business; the Company’s ability to offer
merchandise and services that customers want to purchase; changes
in customer preference from the Company’s branded merchandise; the
Company’s results may be materially impacted if tariffs on imports
to the United States increase and it is unable to offset the
increased costs from current or future tariffs through pricing
negotiations with its vendor base, moving production out of
countries impacted by the tariffs, passing through a portion of the
cost increases to the customer, or other savings opportunities;
customers’ use of the Company’s digital platform, including
customer acceptance of its efforts to enhance its eCommerce
websites, including the Outfitters website; customer response to
the Company’s marketing efforts across all types of media; the
Company’s maintenance of a robust customer list; the Company’s
retail store strategy may be unsuccessful; the Company’s Third
Party channel may not develop as planned or have its desired
impact; the Company’s dependence on information technology and a
failure of information technology systems, including with respect
to its eCommerce operations, or an inability to upgrade or adapt
its systems; fluctuations and increases in costs of raw materials
as well as fluctuations in other production and
distribution-related costs; impairment of the Company’s
relationships with its vendors; the Company’s failure to maintain
the security of customer, employee or company information; the risk
of cybersecurity events and their impact on the Company; the
Company’s failure to compete effectively in the apparel industry;
legal, regulatory, economic and political risks associated with
international trade and those markets in which the Company conducts
business and sources its merchandise; the Company’s failure to
protect or preserve the image of its brands and its intellectual
property rights; increases in postage, paper and printing costs;
failure by third parties who provide the Company with services in
connection with certain aspects of its business to perform their
obligations; the Company’s failure to timely and effectively obtain
shipments of products from its vendors and deliver merchandise to
its customers; reliance on promotions and markdowns to encourage
customer purchases; the Company’s failure to efficiently manage
inventory levels; unseasonal or severe weather conditions; the
adverse effect on the Company’s reputation if its independent
vendors or licensees do not use ethical business practices or
comply with applicable laws and regulations; assessments for
additional state taxes; incurrence of charges due to impairment of
goodwill, other intangible assets and long-lived assets; the impact
on the Company’s business of adverse worldwide economic and market
conditions, including inflation and other economic factors that
negatively impact consumer spending on discretionary items; the
stock repurchase program may not be executed to the full extent
within its duration, due to business or market conditions; the
ability of the Company’s principal stockholders to exert
substantial influence over the Company; and other risks,
uncertainties and factors discussed in the “Risk Factors” section
of the Company’s Annual Report on Form 10-K for the fiscal year
ended January 27, 2023. The Company intends the forward-looking
statements to speak only as of the time made and does not undertake
to update or revise them as more information becomes available,
except as required by law.
CONTACTS
Lands’ End, Inc.Bernard McCrackenChief Financial Officer(608)
935-9341
Investor Relations:ICR, Inc.Tom Filandro(646)
277-1235Tom.Filandro@icrinc.com
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