Lands' End, Inc. ("Lands' End" or the "Company") is a leading uni-channel retailer of casual clothing, accessories, footwear and home products. Lands' End offers products online at www.landsend.com, on third-party online marketplaces and through retail locations.

Terms that are commonly used in the Company's Notes to the Consolidated Financial Statements are defined as follows:

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ABL Facility - Asset-based senior secured credit agreements, dated as of November 16, 2017, with Wells Fargo, N.A. and certain other lenders, as amended to date

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ASC - Financial Accounting Standards Board Accounting Standards Codification, which serves as the source for authoritative GAAP, as supplemented by rules and interpretive releases by the SEC which are also sources of authoritative GAAP for SEC registrants

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ASU - Financial Accounting Standards Board Accounting Standards Update

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CARES Act – The Coronavirus Aid, Relief and Economic Security Act signed into law on March 27, 2020

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Current Term Loan Facility – Term loan credit agreement, dated as of September 9, 2020, among the Company, the Fortress Credit Corp., as Administrative Agent and Collateral Agent, and the lenders party thereto

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Debt Facilities - Collectively, the ABL Facility and Current Term Loan Facility

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Deferred Awards - Time vesting stock awards

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EPS - Earnings per share

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ERP - Enterprise resource planning software solutions

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ESL - ESL Investments, Inc. and its investment affiliates, including Edward S. Lampert

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FASB - Financial Accounting Standards Board

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First Quarter 2020 - The 13 weeks ended May 1, 2020

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Fiscal 2020 – The 52 weeks ended January 29, 2021

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Fiscal 2021 – The Company’s next fiscal year representing the 52 weeks ending January 28, 2022

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Former Term Loan Facility - Term loan credit agreement, dated as of April 4, 2014, with Bank of America, N.A. and certain other lenders, and replaced by the Current Term Loan Facility on September 9, 2020

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Fourth Quarter 2020 – The 13 weeks ended January 29, 2021

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GAAP - Accounting principles generally accepted in the United States

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LIBOR - London inter-bank offered rate

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Option Awards - Stock option awards

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Performance Awards - Performance-based stock awards

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Sears Holdings - Sears Holdings Corporation, a Delaware corporation, and its consolidated subsidiaries

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Sears Roebuck - Sears, Roebuck and Co., a subsidiary of Sears Holdings

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SEC - United States Securities and Exchange Commission

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Second Quarter 2020 – The 13 weeks ended July 31, 2020

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Separation - On April 4, 2014 Sears Holdings distributed 100% of the outstanding common stock of Lands' End to its shareholders

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Tax Act - The Tax Cuts and Jobs Act passed by the United States government on December 22, 2017

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Third Quarter 2020 – The 13 weeks ended October 30, 2020

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Transform Holdco - Transform Holdco LLC, an affiliate of ESL, which on February 11, 2019 acquired from Sears Holdings substantially all of the go-forward retail footprint and other assets and component businesses of Sears Holdings as a going concern

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UTBs - Gross unrecognized tax benefits

The Consolidated Financial Statements include the accounts of Lands' End, Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated.

The accompanying Consolidated Financial Statements have been prepared in accordance with GAAP. In the opinion of management, all material adjustments are of a normal and recurring nature necessary for a fair presentation of the results have been reflected for the periods presented. Dollar amounts are reported in thousands, except per share data, unless otherwise noted.

A novel strain of coronavirus (“COVID-19”) surfaced in late 2019 and in March 2020, the World Health Organization declared COVID-19 a pandemic.

From the beginning of the COVID-19 pandemic, the Company’s priority has been the safety of employees and customers. On March 16, 2020, the Company temporarily closed its 26 U.S. stores. These stores reopened during Second Quarter 2020. Additionally, the Company opened four new stores in Second Quarter 2020 and one new store in Third Quarter 2020. These new Company Operated stores were already planned and construction underway prior to the start of the COVID-19 pandemic. In response to the COVID-19 pandemic, the Company has implemented extra precautions in its Company Operated stores, offices and distribution centers. These precautions were developed in line with guidance from global, federal and state health authorities, including work from home policies, social distancing, thermal scanning and partitions in all facilities.

The eCommerce channel experienced a decline in customer demand in First Quarter 2020, which rebounded in Second Quarter 2020 and continued to be strong the remainder of the year. Consequently, Fiscal 2020 eCommerce revenue has increased compared to prior year. Fiscal 2020 revenue in the Outfitters and Retail channels is lower than Fiscal 2019 due to the reduction in customer demand caused by the COVID-19 pandemic. Retail revenue also declined due to lengthy store closures. The ultimate timing and impact of customer demand levels will depend on the duration and scope of the COVID-19 pandemic, overall economic conditions and consumer preferences.

The Company has not experienced significant supply chain disruptions related to the COVID-19 pandemic. The Company continues to place a priority on business continuity and contingency planning. The Company may experience disruptions in the supply chain as the COVID-19 pandemic continues, though the Company cannot reasonably estimate the potential impact or timing of those events, and the Company may not be able to mitigate such impact.

Beginning in First Quarter 2020, the Company took the following actions to reduce overall expenses as a response to decreased customer demand due to the COVID-19 pandemic:

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Temporarily reduced base salaries, including a reduction of 50% in the base salary of its Chief Executive Officer, 20% reductions in the base salaries of the Company’s other senior management members and scaled salary reductions throughout the Company. All salaries were reinstated during Third Quarter 2020.

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Furlough of approximately 70% of corporate employees from March 28, 2020 to April 13, 2020. As work demand increased the remaining workforce returned to work on an as needed basis with all work furloughs ending by mid-Second Quarter 2020. When the Company Operated stores temporarily closed nearly 100% of Company Operated store employees were furloughed until reopening.

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Fiscal 2020 merit increases were eliminated.

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The Board of Directors compensation was temporarily reduced. This compensation was reinstated in Third Quarter 2020.

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The Company's 401(k) matching contribution was temporarily suspended from April 16, 2020 until January 30, 2021.

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Other discretionary operating expenses were significantly reduced.

In response to the COVID-19 pandemic, the Company’s planned capital expenditures for Fiscal 2020 were significantly reduced.

The Company considered the COVID-19 pandemic to be a triggering event in First Quarter 2020 for the Company’s Outfitters and Japan eCommerce reporting units and therefore completed an interim test for impairment of goodwill for these reporting units as of May 1, 2020. This testing resulted in no impairment of the Company’s Outfitters reporting unit and full impairment of the $3.3 million of goodwill allocated to the Company’s Japan eCommerce reporting unit recorded in the First Quarter 2020. There was not a triggering event or impairment charge for any reporting unit in the remainder of Fiscal 2020.

The Company reduced approximately 10% of corporate positions during the Second Quarter 2020. The Company incurred total severance costs of approximately $2.9 million related to the reduction of corporate positions which was recorded in Other operating expense (income), net in the Consolidated Statements of Operations. As of January 29, 2021, approximately $0.2 million of the severance costs had yet to be paid. In Fiscal 2019, the Company closed five school uniform showrooms.