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Background and Basis of Presentation

12 Months Ended

Jan. 31, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background and Basis of Presentation

NOTE 1. BACKGROUND AND BASIS OF PRESENTATION

Description of Business

Lands’ End, Inc. (“Lands’ End” or the “Company”) is a leading digital retailer of solution-based apparel, swimwear, outerwear, accessories, footwear, home products and uniforms. Lands’ End offers products online at www.landsend.com, through third-party distribution channels and Company Operated stores. The Company also offers products to businesses and schools, for their employees and students, through the Outfitters distribution channel.

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

•ABL Facility – Asset-based senior secured credit agreement, providing for a revolving facility, dated as of November 16, 2017, with Wells Fargo Bank, N.A. and certain other lenders, as amended to date

•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

•Company Operated stores – Lands’ End retail stores in the Retail distribution channel

•Current Term Loan Facility – Term loan credit agreement, dated as of December 29, 2023, among the Company, Blue Torch Capital, as Administrative Agent and Collateral Agent, and the lenders party thereto

•Debt Facilities – Collectively, the Current Term Loan Facility and ABL Facility

•Deferred Awards – Time vesting stock awards

•EPS – Earnings per share

•FASB – Financial Accounting Standards Board

•First Quarter 2024 – The 13 weeks ending May 3, 2024

•Fiscal 2024 – The 52 weeks ending January 31, 2025

•Fiscal 2023 – The 53 weeks ended February 2, 2024

•Fiscal 2022 – The 52 weeks ended January 27, 2023

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

•Fourth Quarter 2024 – The 13 weeks ended January 31, 2025

•GAAP – Accounting principles generally accepted in the United States

•LIBOR – London inter-bank offered rate

•Option Awards – Stock option awards

•Performance Awards – Performance-based stock awards

•SEC – United States Securities and Exchange Commission

•SOFR – Secured Overnight Funding Rate

•Term Loan Adjusted SOFR – SOFR plus adjustments of either (a) 0.11448% for a one-month interest period, (b) 0.26161% for a three-month interest period, or (c) 0.42826% for a six-month interest period

•Target Shares – Number of restricted stock units awarded to a recipient which reflects the number of shares to be delivered based on achievement of target performance goals

•Third Quarter 2023 – The 13 weeks ended October 27, 2023

Basis of Presentation

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 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.

Macroeconomic Challenges

Macroeconomic issues which impact consumer discretionary spending, such as realized inflation-based price increases and high interest rates have continued to have an impact on the Company’s business. Apparel purchases historically have been influenced by domestic and global economic conditions, which may negatively impact customer demand and may require higher levels of promotion in order to attract and retain customers. Additionally, the variable interest rates associated with the Company’s Debt Facilities are negatively affected by higher interest rate environments. Macroeconomic challenges may lead to increased cost of raw materials, packaging materials, labor, energy, fuel, debt and other inputs necessary for the production and distribution of the Company’s products. Moreover, uncertainty with respect to trade policy and tariffs, including increased tariffs applicable to countries where the Company’s vendors manufacture Lands’ End product, may result in an increase in the cost of the Company’s products.

Restructuring

During Fiscal 2024 and Fiscal 2023, the Company reduced approximately 10% of its corporate office positions and incurred restructuring charges, primarily severance and benefit and other related costs. The reductions in the corporate office positions were made to better align with the evolving needs of the business and to invest in key growth areas.

The following table summarizes the restructuring costs recognized in Other operating expense, net in the Consolidated Statement of Operations for Fiscal 2024 and Fiscal 2023:

(in thousands)		Fiscal 2024				Fiscal 2023
Employee severance and benefit costs		$	4,291			$	5,088
Other costs			1,267				2,217
Total restructuring		$	5,558			$	7,305

Included in Accrued expenses and other current liabilities in the Consolidated Balance Sheets are approximately $2.0 million of the employee severance and benefit costs as of January 31, 2025 and approximately $2.9 million of the employee severance and benefit costs and $1.1 million of the other related costs as of February 2, 2024 yet to be paid.

Lands’ End Japan Closure

During Fiscal 2022, the Board of Directors approved a plan to wind down and cease operations of Lands’ End Japan KK. Lands’ End Japan KK represents the Japan eCommerce operating segment. The final liquidation occurred in First Quarter 2024. The Company incurred no closing costs in Fiscal 2024 and approximately $0.3 million and $3.0 million during Fiscal 2023 and Fiscal 2022, respectively, recorded in Other operating expense, net in the Consolidated Statements of Operations. See Note 8, Lands’ End Japan Closure.

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- Definition

The entire disclosure for the general note to the financial statements for the reporting entity which may include, descriptions of the basis of presentation, business description, significant accounting policies, consolidations, reclassifications, new pronouncements not yet adopted and changes in accounting principles.

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