x | Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware | 36-2512786 | |
(State or Other Jurisdiction of Incorporation of Organization) | (I.R.S. Employer Identification No.) | |
1 Lands’ End Lane Dodgeville, Wisconsin | 53595 | |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class: | Name of each exchange on which registered: | |
Common stock, par value $0.01 per share | The NASDAQ Stock Market |
None | ||
(Title of Class) |
Large accelerated filer | ¨ | Accelerated filer | x |
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
Page | ||||
PART I | ||||
Item 1. | ||||
Item 1A. | ||||
Item 1B. | ||||
Item 2. | ||||
Item 3. | ||||
Item 4. | ||||
PART II | ||||
Item 5. | ||||
Item 6. | ||||
Item 7. | ||||
Item 7A. | ||||
Item 8. | ||||
Item 9. | ||||
Item 9A. | ||||
Item 9B. | ||||
PART III | ||||
Item 10. | ||||
Item 11. | ||||
Item 12. | ||||
Item 13. | ||||
Item 14. | ||||
PART IV | ||||
Item 15. | ||||
Item 16. | ||||
(in thousands) | Fiscal 2017 | % of Net revenue | Fiscal 2016 | % of Net revenue | Fiscal 2015 | % of Net revenue | |||||||||||
Net revenue | |||||||||||||||||
Apparel | $ | 1,144,950 | 81.4 | % | $ | 1,086,439 | 81.3 | % | $ | 1,156,047 | 81.4 | % | |||||
Non-apparel | 176,287 | 12.5 | % | 168,945 | 12.6 | % | 183,073 | 12.9 | % | ||||||||
Services and other | 85,440 | 6.1 | % | 80,376 | 6.0 | % | 80,658 | 5.7 | % | ||||||||
Total net revenue | $ | 1,406,677 | 100.0 | % | $ | 1,335,760 | 100.0 | % | $ | 1,419,778 | 100.0 | % |
(in thousands) | Fiscal 2017 | % of Net revenue | Fiscal 2016 | % of Net revenue | Fiscal 2015 | % of Net revenue | ||||||||
Net revenue: | ||||||||||||||
Direct | $ | 1,234,115 | 87.7% | $ | 1,149,149 | 86.0% | $ | 1,214,993 | 85.6% | |||||
Retail | 172,562 | 12.3% | 186,611 | 14.0% | 204,785 | 14.4% | ||||||||
Total Net revenue | $ | 1,406,677 | 100.0% | $ | 1,335,760 | 100.0% | $ | 1,419,778 | 100.0% |
• | Lands' End Earns StellaService's Elite Award for Phone and Email, which is awarded to retailers who provide the very best in customer care, Source: StellaService (March 15, 2017) |
• | Land's End Named Customer Experience Leader, Source: Mulitchannel Merchant (March 17, 2017) |
• | Lands' End Named Customer Service Champion, Source: Prosper Insights & Analytics. Featured on Forbes.com (August 3, 2017) |
Name | Position | Age | Date First Became an Executive Officer | |||
Jerome S. Griffith | Chief Executive Officer and President | 60 | 2017 | |||
James F. Gooch | Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer | 50 | 2016 | |||
Peter L. Gray | Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary | 50 | 2017 | |||
Gill Hong | Executive Vice President, Chief Merchandising Officer and Head of International | 51 | 2017 | |||
Kelly Ritchie | Senior Vice President, Employee and Customer Services | 54 | 1999 |
• | 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. |
• | 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. |
Number of Stores | |
Fiscal 2018 | 94 |
Fiscal 2019 | 80 |
Fiscal 2017 | ||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||
Common Stock Price | ||||||||
High | $23.75 | $24.80 | $14.95 | $20.78 | ||||
Low | 15.05 | 13.15 | 11.20 | 10.55 | ||||
Fiscal 2016 | ||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||
Common Stock Price | ||||||||
High | $26.30 | $23.61 | $18.81 | $18.40 | ||||
Low | 21.48 | 14.71 | 14.60 | 15.30 |
3/20/2014 | 1/30/2015 | 1/29/2016 | 1/27/2017 | 2/2/2018 | |||||||||||
Lands' End, Inc. | $ | 100 | $ | 104 | $ | 65 | $ | 46 | $ | 49 | |||||
NASDAQ Composite Index | $ | 100 | $ | 107 | $ | 107 | $ | 131 | $ | 168 | |||||
NASDAQ Retail Index | $ | 100 | $ | 107 | $ | 108 | $ | 115 | $ | 148 |
Fiscal Year | |||||||||||||||||||
(in thousands, except per share data and number of stores) | 2017 | 2016 | 2015 | 2014(1) | 2013(1) | ||||||||||||||
Consolidated Statement of Operations Data(2) | |||||||||||||||||||
Net revenue | $ | 1,406,677 | $ | 1,335,760 | $ | 1,419,778 | $ | 1,555,353 | $ | 1,562,876 | |||||||||
Net income (loss)(3)(4)(5)(6) | $ | 28,195 | $ | (109,782 | ) | $ | (19,548 | ) | $ | 73,799 | $ | 78,847 | |||||||
Basic and diluted earnings (loss) per common share(3)(4)(5)(6)(7) | $ | 0.88 | $ | (3.43 | ) | $ | (0.61 | ) | $ | 2.31 | $ | 2.47 | |||||||
Basic average shares outstanding | 32,076 | 32,021 | 31,979 | 31,957 | 31,957 | ||||||||||||||
Diluted average shares outstanding | 32,110 | 32,021 | 31,979 | 32,016 | 31,957 | ||||||||||||||
Consolidated Balance Sheet Data | |||||||||||||||||||
Total assets | $ | 1,124,135 | $ | 1,114,391 | $ | 1,288,526 | $ | 1,349,999 | $ | 1,194,275 | |||||||||
Other Financial and Operating Data | |||||||||||||||||||
Adjusted EBITDA(8) | $ | 58,264 | $ | 39,832 | $ | 107,288 | $ | 164,298 | $ | 150,010 | |||||||||
Number of stores at year end | 189 | 230 | 246 | 255 | 290 |
(1) | Fiscal 2014 and Fiscal 2013 show results of the Company with combined financial information that may not be indicative of future performance and does not necessarily reflect what the financial position and results of operations would have been had the Company operated as a publicly traded company independent from Sears Holdings during those periods. |
(2) | The Company's fiscal year end is on the Friday preceding the Saturday closest to January 31 each year. Fiscal year 2017 consisted of 53 weeks. All other fiscal years consisted of 52 weeks. |
(3) | Fiscal 2016 Net loss includes an impairment charge of $173.0 million, $107.8 million net of tax, related to the non-cash write-down of the Company's trade name intangible asset, Lands' End. |
(4) | 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 the Company's trade name intangible asset, Lands' End. |
(5) | Fiscal 2017, Fiscal 2016, Fiscal 2015 and Fiscal 2014 Net income (loss) includes interest expense and stand-alone public company expenses which did not exist in prior periods. |
(6) | Fiscal 2017 Net income includes the impact of the Tax Act reform. See Note 9, Income Taxes, for additional details. |
(7) | 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, where applicable. Refer to Note 2, Summary of Significant Accounting Policies, to the Consolidated and Combined Financial Statements for information regarding earnings per share. |
(8) | Adjusted EBITDA—In addition to our Net income (loss) 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. 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 or benefits. |
• | 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 intangible asset, Lands' End, in Fiscal 2016 and Fiscal 2015. |
• | Product recall—costs associated with a recall in Fiscal 2014 and the subsequent reversal of some costs in Fiscal 2016 and Fiscal 2015 as customer return rates were lower than Company estimates. |
• | Transfer of corporate functions—severance and contract losses associated with a transition of certain corporate activities from our New York office to our Dodgeville headquarters. |
• | 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) | 2017 | 2016 | 2015 | 2014(1) | 2013(1) | ||||||||||||||
Net income (loss) | $ | 28,195 | $ | (109,782 | ) | $ | (19,548 | ) | $ | 73,799 | $ | 78,847 | |||||||
Income tax (benefit) expense | (27,747 | ) | (69,098 | ) | (9,691 | ) | 46,758 | 49,544 | |||||||||||
Other expense (income), net | 2,708 | 1,619 | (671 | ) | (1,408 | ) | (50 | ) | |||||||||||
Interest expense | 25,929 | 24,630 | 24,826 | 20,494 | — | ||||||||||||||
Intangible asset impairment | — | 173,000 | 98,300 | — | — | ||||||||||||||
Depreciation and amortization | 24,910 | 19,003 | 17,399 | 19,703 | 21,599 | ||||||||||||||
Product recall | — | (212 | ) | (3,371 | ) | 4,713 | — | ||||||||||||
Transfer of corporate functions | 3,921 | — | — | — | — | ||||||||||||||
Loss on sale of property and equipment | 348 | 672 | 44 | 239 | 70 | ||||||||||||||
Adjusted EBITDA | $ | 58,264 | $ | 39,832 | $ | 107,288 | $ | 164,298 | $ | 150,010 |
• | 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 consolidated and segment results of operations for Fiscal 2017, Fiscal 2016 and Fiscal 2015. |
• | 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 five 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 Year | Ended | Weeks | ||
2017 | February 2, 2018 | 53 | ||
2016 | January 27, 2017 | 52 | ||
2015 | January 29, 2016 | 52 |
Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | ||||||||||||||||||
(in thousands) | $'s | % of Net Revenue | $'s | % of Net Revenue | $'s | % of Net Revenue | ||||||||||||||
Net revenue | $ | 1,406,677 | 100.0 | % | $ | 1,335,760 | 100.0 | % | $ | 1,419,778 | 100.0 | % | ||||||||
Cost of sales (excluding depreciation and amortization) | 809,474 | 57.5 | % | 759,352 | 56.8 | % | 767,189 | 54.0 | % | |||||||||||
Gross profit | 597,203 | 42.5 | % | 576,408 | 43.2 | % | 652,589 | 46.0 | % | |||||||||||
Selling and administrative | 538,939 | 38.3 | % | 536,576 | 40.2 | % | 545,301 | 38.4 | % | |||||||||||
Depreciation and amortization | 24,910 | 1.8 | % | 19,003 | 1.4 | % | 17,399 | 1.2 | % | |||||||||||
Intangible asset impairment | — | — | % | 173,000 | 13.0 | % | 98,300 | 6.9 | % | |||||||||||
Other operating expense (income), net | 4,269 | 0.3 | % | 460 | — | % | (3,327 | ) | (0.2 | )% | ||||||||||
Operating income (loss) | 29,085 | 2.1 | % | (152,631 | ) | (11.4 | )% | (5,084 | ) | (0.4 | )% | |||||||||
Interest expense | 25,929 | 1.8 | % | 24,630 | 1.8 | % | 24,826 | 1.7 | % | |||||||||||
Other expense (income), net | 2,708 | 0.2 | % | 1,619 | 0.1 | % | (671 | ) | — | % | ||||||||||
Income (loss) before income taxes | 448 | — | % | (178,880 | ) | (13.4 | )% | (29,239 | ) | (2.1 | )% | |||||||||
Income tax benefit | (27,747 | ) | (2.0 | )% | (69,098 | ) | (5.2 | )% | (9,691 | ) | (0.7 | )% | ||||||||
Net income (loss) | $ | 28,195 | 2.0 | % | $ | (109,782 | ) | (8.2 | )% | $ | (19,548 | ) | (1.4 | )% |
• | 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—charge associated with the non-cash write-down of our trade name intangible asset, Lands' End, in Fiscal 2016 and Fiscal 2015. |
▪ | Product recall—costs associated with a recall in Fiscal 2014 and the subsequent reversal of some costs in Fiscal 2015 and Fiscal 2016 as customer return rates were lower than Company estimates. |
▪ | Transfer of corporate functions—severance and contract losses associated with a transition of certain corporate activities from our New York office to our Dodgeville headquarters. |
▪ | 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 2017 | Fiscal 2016 | Fiscal 2015 | ||||||||||||||||||
(in thousands) | $'s | % of Net Revenue | $'s | % of Net Revenue | $'s | % of Net Revenue | ||||||||||||||
Net income (loss) | $ | 28,195 | 2.0 | % | $ | (109,782 | ) | (8.2 | )% | $ | (19,548 | ) | (1.4 | )% | ||||||
Income tax benefit | (27,747 | ) | (2.0 | )% | (69,098 | ) | (5.2 | )% | (9,691 | ) | (0.7 | )% | ||||||||
Other expense (income), net | 2,708 | 0.2 | % | 1,619 | 0.1 | % | (671 | ) | — | % | ||||||||||
Interest expense | 25,929 | 1.8 | % | 24,630 | 1.8 | % | 24,826 | 1.7 | % | |||||||||||
Operating income (loss) | 29,085 | 2.1 | % | (152,631 | ) | (11.4 | )% | (5,084 | ) | (0.4 | )% | |||||||||
Intangible asset impairment | — | — | % | 173,000 | 13.0 | % | 98,300 | 6.9 | % | |||||||||||
Depreciation and amortization | 24,910 | 1.8 | % | 19,003 | 1.4 | % | 17,399 | 1.2 | % | |||||||||||
Product recall | — | — | % | (212 | ) | — | % | (3,371 | ) | (0.2 | )% | |||||||||
Transfer of corporate functions | 3,921 | 0.3 | % | — | — | % | — | — | % | |||||||||||
Loss on disposal of property and equipment | 348 | — | % | 672 | 0.1 | % | 44 | — | % | |||||||||||
Adjusted EBITDA | $ | 58,264 | 4.1 | % | $ | 39,832 | 3.0 | % | 107,288 | 7.6 | % |
• | Higher revenues, which drove an increase in Net income before non-cash items |
• | Lower revenues, which drove a decrease in Net (loss) income before non-cash items, |
• | Prior year cash payments for taxes and incentive compensation and |
• | Changes in marketing strategies, driving increased prepaid advertising, partially offset by |
• | Improved inventory management. |
Payments Due by Period | |||||||||||||||||||
(in thousands) | Total | Less than 1 year | 2-3 Years | 4-5 Years | After 5 years | ||||||||||||||
Operating leases(1) | $ | 48,771 | $ | 21,597 | $ | 17,369 | $ | 6,291 | $ | 3,514 | |||||||||
Principal payments on long-term debt | 495,688 | 5,150 | 10,300 | 480,238 | — | ||||||||||||||
Interest on long-term debt and Current ABL Facility fees | 78,572 | 24,831 | 48,300 | 5,441 | — | ||||||||||||||
Purchase obligations(2) | 196,444 | 196,444 | — | — | — | ||||||||||||||
Total contractual obligations | $ | 819,475 | $ | 248,022 | $ | 75,969 | $ | 491,970 | $ | 3,514 |
(in thousands except per share data) | 2017 | 2016 | 2015 | |||||||||
REVENUES | ||||||||||||
Net revenue | $ | 1,406,677 | $ | 1,335,760 | $ | 1,419,778 | ||||||
Cost of sales (excluding depreciation and amortization) | 809,474 | 759,352 | 767,189 | |||||||||
Gross profit | 597,203 | 576,408 | 652,589 | |||||||||
Selling and administrative | 538,939 | 536,576 | 545,301 | |||||||||
Depreciation and amortization | 24,910 | 19,003 | 17,399 | |||||||||
Intangible asset impairment | — | 173,000 | 98,300 | |||||||||
Other operating expense (income), net | 4,269 | 460 | (3,327 | ) | ||||||||
Total costs and expenses | 568,118 | 729,039 | 657,673 | |||||||||
Operating income (loss) | 29,085 | (152,631 | ) | (5,084 | ) | |||||||
Interest expense | 25,929 | 24,630 | 24,826 | |||||||||
Other expense (income), net | 2,708 | 1,619 | (671 | ) | ||||||||
Income (loss) before income taxes | 448 | (178,880 | ) | (29,239 | ) | |||||||
Income tax benefit | (27,747 | ) | (69,098 | ) | (9,691 | ) | ||||||
NET INCOME (LOSS) | $ | 28,195 | $ | (109,782 | ) | $ | (19,548 | ) | ||||
NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO STOCKHOLDERS (Note 2) | ||||||||||||
Basic: | $ | 0.88 | $ | (3.43 | ) | $ | (0.61 | ) | ||||
Diluted: | $ | 0.88 | $ | (3.43 | ) | $ | (0.61 | ) | ||||
Basic weighted average common shares outstanding | 32,076 | 32,021 | 31,979 | |||||||||
Diluted weighted average common shares outstanding | 32,110 | 32,021 | 31,979 |
(in thousands) | 2017 | 2016 | 2015 | |||||||||
NET INCOME (LOSS) | $ | 28,195 | $ | (109,782 | ) | $ | (19,548 | ) | ||||
Other comprehensive income (loss), net of tax | ||||||||||||
Foreign currency translation adjustments | 4,282 | (3,042 | ) | (2,086 | ) | |||||||
COMPREHENSIVE INCOME (LOSS) | $ | 32,477 | $ | (112,824 | ) | $ | (21,634 | ) |
(in thousands, except share data) | February 2, 2018 | January 27, 2017 | ||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 195,581 | $ | 213,108 | ||||
Restricted cash | 2,356 | 3,300 | ||||||
Accounts receivable, net | 49,860 | 39,284 | ||||||
Inventories, net | 332,297 | 325,314 | ||||||
Prepaid expenses and other current assets | 26,659 | 26,394 | ||||||
Total current assets | 606,753 | 607,400 | ||||||
Property and equipment, net | 136,501 | 122,836 | ||||||
Goodwill | 110,000 | 110,000 | ||||||
Intangible asset, net | 257,000 | 257,000 | ||||||
Other assets | 13,881 | 17,155 | ||||||
Total assets | $ | 1,124,135 | $ | 1,114,391 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 155,874 | $ | 162,408 | ||||
Other current liabilities | 100,257 | 86,446 | ||||||
Total current liabilities | 256,131 | 248,854 | ||||||
Long-term debt, net | 486,248 | 490,043 | ||||||
Long-term deferred tax liabilities | 59,137 | 90,467 | ||||||
Other liabilities | 15,526 | 13,615 | ||||||
Total liabilities | 817,042 | 842,979 | ||||||
Commitments and contingencies | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
Common stock, par value $0.01- authorized: 480,000,000 shares; issued and outstanding: 32,101,793 and 32,029,359, respectively | 320 | 320 | ||||||
Additional paid-in capital | 347,175 | 343,971 | ||||||
Accumulated deficit | (29,810 | ) | (60,453 | ) | ||||
Accumulated other comprehensive loss | (10,592 | ) | (12,426 | ) | ||||
Total stockholders’ equity | 307,093 | 271,412 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,124,135 | $ | 1,114,391 |
(in thousands) | 2017 | 2016 | 2015 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net income (loss) | $ | 28,195 | $ | (109,782 | ) | $ | (19,548 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 24,910 | 19,003 | 17,399 | |||||||||
Intangible asset impairment | — | 173,000 | 98,300 | |||||||||
Product recall | — | (212 | ) | (3,371 | ) | |||||||
Amortization of debt issuance costs | 1,904 | 1,712 | 1,741 | |||||||||
Loss on disposal of property and equipment | 348 | 672 | 44 | |||||||||
Stock-based compensation | 3,951 | 2,230 | 2,395 | |||||||||
Deferred income taxes | (32,757 | ) | (67,253 | ) | (22,670 | ) | ||||||
Change in operating assets and liabilities: | ||||||||||||
Inventories | (2,709 | ) | 755 | (29,819 | ) | |||||||
Accounts payable | (6,950 | ) | 16,951 | 10,005 | ||||||||
Other operating assets | (3,234 | ) | (12,356 | ) | 3,462 | |||||||
Other operating liabilities | 14,779 | (631 | ) | (21,602 | ) | |||||||
Net cash provided by operating activities | 28,437 | 24,089 | 36,336 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Proceeds from sale of property and equipment | 68 | 47 | — | |||||||||
Change in restricted cash | 944 | — | — | |||||||||
Purchases of property and equipment | (38,145 | ) | (33,319 | ) | (22,224 | ) | ||||||
Net cash used in investing activities | (37,133 | ) | (33,272 | ) | (22,224 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Payments of employee withholding taxes on share-based compensation | (747 | ) | (396 | ) | (445 | ) | ||||||
Debt issuance costs | (1,515 | ) | — | — | ||||||||
Payments on term loan facility | (5,150 | ) | (5,150 | ) | (5,150 | ) | ||||||
Net cash used in financing activities | (7,412 | ) | (5,546 | ) | (5,595 | ) | ||||||
Effects of exchange rate changes on cash | (1,419 | ) | (531 | ) | (1,603 | ) | ||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (17,527 | ) | (15,260 | ) | 6,914 | |||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 213,108 | 228,368 | 221,454 | |||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 195,581 | $ | 213,108 | $ | 228,368 | ||||||
SUPPLEMENTAL INFORMATION: | ||||||||||||
Supplemental Cash Flow Data: | ||||||||||||
Unpaid liability to acquire property and equipment | $ | 7,756 | $ | 8,419 | $ | 8,182 | ||||||
Income taxes paid | $ | 3,379 | $ | 3,653 | $ | 23,991 | ||||||
Interest paid | $ | 23,458 | $ | 22,484 | $ | 22,690 |
Common Stock Issued | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | ||||||||||||||||||
(in thousands except share data) | Shares | Amount | ||||||||||||||||||||
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 | |||||||||||||||
Net loss | — | — | — | (109,782 | ) | — | (109,782 | ) | ||||||||||||||
Cumulative translation adjustment, net of tax | — | — | — | — | (3,042 | ) | (3,042 | ) | ||||||||||||||
Adjustment from pre-Separation deferred tax liabilities | — | — | (2,107 | ) | — | — | (2,107 | ) | ||||||||||||||
Stock-based compensation expense | — | — | 2,230 | — | — | 2,230 | ||||||||||||||||
Vesting of restricted shares | 57,543 | — | — | — | — | — | ||||||||||||||||
Restricted stock shares surrendered for taxes | (19,852 | ) | — | (396 | ) | — | — | (396 | ) | |||||||||||||
Balance at January 27, 2017 | 32,029,359 | 320 | 343,971 | (60,453 | ) | (12,426 | ) | 271,412 | ||||||||||||||
Net income | — | — | — | 28,195 | — | 28,195 | ||||||||||||||||
Cumulative translation adjustment, net of tax | — | — | — | — | 4,282 | 4,282 | ||||||||||||||||
Impact of Tax Act | — | — | — | 2,448 | (2,448 | ) | — | |||||||||||||||
Stock-based compensation expense | — | — | 3,951 | — | — | 3,951 | ||||||||||||||||
Vesting of restricted shares | 110,162 | — | — | — | — | — | ||||||||||||||||
Restricted stock shares surrendered for taxes | (37,728 | ) | — | (747 | ) | — | — | (747 | ) | |||||||||||||
Balance at February 2, 2018 | 32,101,793 | $ | 320 | $ | 347,175 | $ | (29,810 | ) | $ | (10,592 | ) | $ | 307,093 |
Fiscal Year | Ended | Weeks | ||
2017 | February 2, 2018 | 53 | ||
2016 | January 27, 2017 | 52 | ||
2015 | January 29, 2016 | 52 |
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | ||||||||
Beginning balance | $ | 579 | $ | 626 | $ | 688 | |||||
Provision | 187 | 281 | 286 | ||||||||
Write-offs | (129 | ) | (328 | ) | (348 | ) | |||||
Ending balance | $ | 637 | $ | 579 | $ | 626 |
(in thousands) | Asset Lives | February 2, 2018 | January 27, 2017 | ||||||
Land | — | $ | 3,533 | $ | 3,466 | ||||
Buildings and improvements | 15-30 | 100,122 | 98,213 | ||||||
Furniture, fixtures and equipment | 3-10 | 69,940 | 78,563 | ||||||
Computer hardware and software | 3-10 | 122,336 | 82,491 | ||||||
Leasehold improvements | 3-7 | 10,329 | 11,176 | ||||||
Assets in development | 23,428 | 34,882 | |||||||
Gross property and equipment | 329,688 | 308,791 | |||||||
Accumulated depreciation | (193,187 | ) | (185,955 | ) | |||||
Total property and equipment, net | $ | 136,501 | $ | 122,836 |
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | ||||||||
Beginning balance | $ | 11,794 | $ | 12,605 | $ | 13,868 | |||||
Provision | 159,440 | 143,410 | 166,579 | ||||||||
Write-offs | (160,101 | ) | (144,221 | ) | (167,842 | ) | |||||
Ending balance | $ | 11,133 | $ | 11,794 | $ | 12,605 |
(in thousands) | Termination Costs | Other Costs | Total | ||||||||
Balance as of January 27, 2017 | $ | — | $ | — | $ | — | |||||
Provision | 2,401 | 1,520 | 3,921 | ||||||||
Cash disbursements | (1,793 | ) | — | (1,793 | ) | ||||||
Non-cash items | — | 546 | 546 | ||||||||
Balance as of February 2, 2018 | $ | 608 | $ | 2,066 | $ | 2,674 |
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | |||||||||
Beginning balance: Accumulated other comprehensive loss (net of tax of $6,691, $5,053 and $3,931, respectively) | $ | (12,426 | ) | $ | (9,384 | ) | $ | (7,298 | ) | |||
Other comprehensive income (loss) | ||||||||||||
Foreign currency translation adjustments (net of tax of $(1,427), $1,638, and $1,122, respectively) | 4,282 | (3,042 | ) | (2,086 | ) | |||||||
Impact of Tax Act | (2,448 | ) | — | — | ||||||||
Ending balance: Accumulated other comprehensive loss (net of tax of $2,816, $6,691, and $5,053 respectively) | $ | (10,592 | ) | $ | (12,426 | ) | $ | (9,384 | ) |
(in thousands, except per share amounts) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | |||||||||
Net income (loss) | $ | 28,195 | $ | (109,782 | ) | $ | (19,548 | ) | ||||
Basic weighted average shares outstanding | 32,076 | 32,021 | 31,979 | |||||||||
Dilutive effect of stock awards | 34 | — | — | |||||||||
Diluted weighted average shares outstanding | 32,110 | 32,021 | 31,979 | |||||||||
Basic earnings (loss) per share | $ | 0.88 | $ | (3.43 | ) | $ | (0.61 | ) | ||||
Diluted earnings (loss) per share | $ | 0.88 | $ | (3.43 | ) | $ | (0.61 | ) |
February 2, 2018 | January 27, 2017 | |||||||||||||
(in thousands) | Principal Amount | Interest Rate | Principal Amount | Interest Rate | ||||||||||
Term Loan Facility, maturing April 4, 2021 | $ | 495,688 | 4.82 | % | $ | 500,838 | 4.25 | % | ||||||
Current ABL Facility, maturing November 16, 2022 | — | — | % | — | — | % | ||||||||
Prior ABL Facility, maturing April 4, 2019(1) | — | — | % | — | — | % | ||||||||
495,688 | 500,838 | |||||||||||||
Less: current maturities in Other current liabilities | 5,150 | 5,150 | ||||||||||||
Less: unamortized debt issuance costs | 4,290 | 5,645 | ||||||||||||
Long-term debt, net | $ | 486,248 | $ | 490,043 |
(in thousands) | February 2, 2018 | January 27, 2017 | ||||||
Current ABL Facility maximum borrowing | $ | 175,000 | $ | — | ||||
Prior ABL Facility maximum borrowing | — | 175,000 | ||||||
Outstanding letters of credit | 22,328 | 19,705 | ||||||
Borrowing availability under ABL | $ | 152,672 | $ | 155,295 |
(in thousands) | ||||
Less than 1 year | $ | 5,150 | ||
1 - 2 years | 5,150 | |||
2 - 3 years | 5,150 | |||
3 - 4 years | 480,238 | |||
$ | 495,688 |
2018 | $ | 21,597 | |
2019 | 12,936 | ||
2020 | 4,433 | ||
2021 | 3,570 | ||
2022 | 2,721 | ||
Thereafter | 3,514 | ||
Total minimum payments required(1) | 48,771 |
Number of Stores | |
Fiscal 2018 | 94 |
Fiscal 2019 | 80 |
i. | Time vesting stock awards ("Deferred Awards") are in the form of restricted stock units and only require each recipient to complete a service period for the awards to be earned. Deferred Awards generally vest over three years or in full after a three year period. The fair value of Deferred Awards is based on the closing price of the Company's common stock on the grant date and is reduced for estimated forfeitures of those awards not expected to vest due to employee turnover. |
ii. | Stock option awards ("Option Awards") provide the recipient with the option to purchase a set number of shares at a stated exercise price over the term of the contract, which is 10 years for all Option Awards currently outstanding. |
iii. | Performance-based stock awards ("Performance Awards") are in the form of restricted stock units and have, in addition to a service requirement, performance criteria that must be achieved for the awards to be earned. Performance Awards have annual vesting, but due to the performance criteria, are not eligible for straight-line expensing. Therefore, Performance Awards are amortized using a graded expense process. Similar to Deferred Awards, Performance Awards fair value is based on the closing price of the Company's common stock on the grant date and the compensation expense is reduced for estimated forfeitures of those awards not expected to vest due to employee turnover. |
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | ||||||
Deferred Awards | $ | 3,212 | $ | 1,599 | $ | 1,534 | |||
Option Awards | 651 | — | — | ||||||
Performance Awards | 88 | 631 | 861 | ||||||
Total stock-based compensation expense | $ | 3,951 | $ | 2,230 | $ | 2,395 |
Deferred Awards | Option Awards | Performance Awards | |||||||||||||||||||
(in thousands, except per share amounts) | Number of Shares | Weighted Average Grant Date Fair Value per Share | Number of Shares | Weighted Average Grant Date Fair Value per Share | Number of Shares | Weighted Average Grant Date Fair Value per Share | |||||||||||||||
Unvested Deferred Awards, as of January 27, 2017 | 252 | $ | 24.42 | — | $ | — | 69 | $ | 26.38 | ||||||||||||
Granted | 422 | 21.49 | 343 | 8.73 | — | — | |||||||||||||||
Vested | (70 | ) | 22.66 | — | — | (41 | ) | 28.33 | |||||||||||||
Exercised | — | — | — | — | — | — | |||||||||||||||
Forfeited or expired | (107 | ) | 24.85 | — | — | (13 | ) | 25.20 | |||||||||||||
Unvested Deferred Awards, as of February 2, 2018 | 497 | 22.07 | 343 | 8.73 | 15 | 21.94 |
Deferred Awards | Option Awards | Performance Awards | |||||||||||||||||||
(in thousands, except per share amounts) | Number of Shares | Weighted Average Grant Date Fair Value per Share | Number of Shares | Weighted Average Grant Date Fair Value per Share | Number of Shares | Weighted Average Grant Date Fair Value per Share | |||||||||||||||
Unvested Deferred Awards, as of January 29, 2016 | 175 | $ | 30.87 | — | $ | — | 109 | $ | 26.81 | ||||||||||||
Granted | 242 | 23.93 | — | — | — | — | |||||||||||||||
Vested | (27 | ) | 33.53 | — | — | (30 | ) | 27.84 | |||||||||||||
Exercised | — | — | — | — | — | — | |||||||||||||||
Forfeited or expired | (138 | ) | 30.05 | — | — | (10 | ) | 26.73 | |||||||||||||
Unvested Deferred Awards, as of January 27, 2017 | 252 | 24.42 | — | — | 69 | 26.38 |
Assumption | Low | High | ||
Risk-free interest rate | 1.82% | - | 1.90% | |
Expected dividend yield | —% | - | —% | |
Volatility | 45.59% | - | 46.12% | |
Expected life (in years) | 6.25 | - | 6.25 | |
Weighted average exercise price per share | $18.10 | - | $22.00 |
(in thousands) | February 2, 2018 | January 27, 2017 | |||||
Deferred gift card revenue | $ | 19,272 | $ | 19,999 | |||
Accrued employee compensation and benefits | 32,302 | 13,165 | |||||
Reserve for sales returns and allowances | 11,133 | 11,794 | |||||
Deferred revenue | 12,993 | 10,660 | |||||
Accrued property, sales and other taxes | 6,663 | 7,578 | |||||
Short-term portion of long-term debt | 5,150 | 5,150 | |||||
Other | 12,744 | 18,100 | |||||
Total other current liabilities | $ | 100,257 | $ | 86,446 |
February 2, 2018 | January 27, 2017 | |||||||||||||||
(in thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Long-term debt, including short-term portion | $ | 495,688 | $ | 443,641 | $ | 500,838 | $ | 379,385 |
(in thousands) | Trade Name | Goodwill | ||||||
Balance as of January 29, 2016 | $ | 430,000 | $ | 110,000 | ||||
Impairments | (173,000 | ) | — | |||||
Balance as of January 27, 2017 | 257,000 | 110,000 | ||||||
Impairments | — | — | ||||||
Balance as of February 2, 2018 | $ | 257,000 | $ | 110,000 |
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | ||||||||
Income (loss) before income taxes: | |||||||||||
United States | $ | 9,011 | $ | (174,461 | ) | $ | (31,206 | ) | |||
Foreign | (8,563 | ) | (4,419 | ) | 1,967 | ||||||
Total income (loss) before income taxes | $ | 448 | $ | (178,880 | ) | $ | (29,239 | ) |
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | ||||||||
United States | $ | (27,623 | ) | $ | (70,316 | ) | $ | (9,737 | ) | ||
Foreign | (124 | ) | 1,218 | 46 | |||||||
Total (benefit) provision | $ | (27,747 | ) | $ | (69,098 | ) | $ | (9,691 | ) |
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | ||||||||
Current: | |||||||||||
Federal | $ | 4,804 | $ | (2,834 | ) | $ | 10,524 | ||||
State | 330 | (229 | ) | 2,409 | |||||||
Foreign | (124 | ) | 1,218 | 46 | |||||||
Total current | 5,010 | (1,845 | ) | 12,979 | |||||||
Deferred: | |||||||||||
Federal | (34,901 | ) | (62,645 | ) | (20,956 | ) | |||||
State | 2,144 | (4,608 | ) | (1,714 | ) | ||||||
Total deferred | (32,757 | ) | (67,253 | ) | (22,670 | ) | |||||
Total (benefit) provision | $ | (27,747 | ) | $ | (69,098 | ) | $ | (9,691 | ) |
Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | ||||||
Tax at statutory federal income tax rate | 33.8 | % | 35.0 | % | 35.0 | % | ||
State income taxes, net of federal tax benefit | 103.5 | % | 2.7 | % | (1.6 | )% | ||
Foreign differential | 108.6 | % | — | % | — | % | ||
Permanent differences | 383.1 | % | (0.7 | )% | (1.9 | )% | ||
Tax reform revaluation of deferred taxes | (7,793.7 | )% | — | % | — | % | ||
Transition tax on repatriated foreign earnings | 950.9 | % | — | % | — | % | ||
Uncertain tax benefits | (600.1 | )% | 0.8 | % | 1.3 | % | ||
Change in foreign valuation allowance | 509.8 | % | — | % | — | % | ||
Other, net | 110.6 | % | 0.8 | % | 0.3 | % | ||
Total at effective income tax rate | (6,193.5 | )% | 38.6 | % | 33.1 | % |
(in thousands) | February 2, 2018 | January 27, 2017 | |||||
Deferred tax assets: | |||||||
Deferred revenue | $ | 3,292 | $ | 4,903 | |||
Legal and other reserves | 1,512 | 1,892 | |||||
Deferred compensation | 4,029 | 4,653 | |||||
Reserve for returns | 2,301 | 3,578 | |||||
Inventory | 3,099 | 7,817 | |||||
Currency translation adjustment - foreign subsidiaries | 2,816 | 6,691 | |||||
Other | 4,330 | 8,197 | |||||
Total deferred tax assets | 21,379 | 37,731 | |||||
Foreign net operating loss carryforward | 2,284 | — | |||||
Less valuation allowance | (2,284 | ) | — | ||||
Net deferred tax assets | 21,379 | 37,731 | |||||
Deferred tax liabilities: | |||||||
Intangible assets | 62,754 | 96,812 | |||||
LIFO reserve | 16,659 | 24,601 | |||||
Unremitted foreign earnings | — | 5,208 | |||||
Catalog marketing | 1,103 | 1,577 | |||||
Total deferred tax liabilities | 80,516 | 128,198 | |||||
Net deferred tax liability | $ | 59,137 | $ | 90,467 |
Federal, State and Foreign Tax | |||||||||||
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | ||||||||
Gross UTB balance at beginning of period | $ | 6,901 | $ | 8,311 | $ | 9,082 | |||||
Tax positions related to the current period—gross increases | — | 120 | 116 | ||||||||
Tax positions related to the prior periods—gross decreases | (2,370 | ) | (1,530 | ) | (697 | ) | |||||
Settlements | — | — | (190 | ) | |||||||
Gross UTB balance at end of period | $ | 4,531 | $ | 6,901 | $ | 8,311 |
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | |||||||||
Retail services, store labor | $ | 21,934 | $ | 24,052 | $ | 26,773 | ||||||
Rent, CAM and occupancy costs | 22,084 | 24,727 | 25,239 | |||||||||
Financial services and payment processing | 2,455 | 2,834 | 2,792 | |||||||||
Supply chain costs | 741 | 979 | 985 | |||||||||
Total expenses | $ | 47,214 | $ | 52,592 | $ | 55,789 | ||||||
Number of Lands' End Shops at Sears at period end(1) | 174 | 216 | 227 |
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | |||||||||
Sourcing | $ | 10,243 | $ | 10,878 | $ | 9,609 | ||||||
Shop Your Way | 1,119 | 2,301 | 2,896 | |||||||||
Shared services | 176 | 192 | 484 | |||||||||
Total expenses | $ | 11,538 | $ | 13,371 | $ | 12,989 |
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | |||||||||
Call center services | $ | 1,160 | $ | 8,207 | $ | 8,564 | ||||||
Lands' End business outfitters revenue | 1,045 | 1,574 | 1,398 | |||||||||
Credit card revenue | 980 | 1,147 | 1,274 | |||||||||
Royalty income | 213 | 221 | 220 | |||||||||
Gift card revenue (expense) | (32 | ) | (32 | ) | (33 | ) | ||||||
Total | $ | 3,366 | $ | 11,117 | $ | 11,423 |
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | |||||||||
Net revenue: | ||||||||||||
Apparel | $ | 1,144,950 | $ | 1,086,439 | $ | 1,156,047 | ||||||
Non-apparel | 176,287 | 168,945 | 183,073 | |||||||||
Services and other | 85,440 | 80,376 | 80,658 | |||||||||
Total Net revenue | $ | 1,406,677 | $ | 1,335,760 | $ | 1,419,778 |
• | 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 Lands' End 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 2017 | Fiscal 2016 | Fiscal 2015 | |||||||||
Net revenue: | ||||||||||||
Direct | $ | 1,234,115 | $ | 1,149,149 | $ | 1,214,993 | ||||||
Retail | 172,562 | 186,611 | 204,785 | |||||||||
Total Net revenue | $ | 1,406,677 | $ | 1,335,760 | $ | 1,419,778 |
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | |||||||||
Adjusted EBITDA: | ||||||||||||
Direct | $ | 104,632 | $ | 78,582 | $ | 141,936 | ||||||
Retail | (7,866 | ) | (5,339 | ) | (301 | ) | ||||||
Corporate/other | (38,502 | ) | (33,411 | ) | (34,347 | ) | ||||||
Total adjusted EBITDA | $ | 58,264 | $ | 39,832 | $ | 107,288 | ||||||
Loss on disposal of property and equipment | 348 | 672 | 44 | |||||||||
Transfer of corporate functions | 3,921 | — | — | |||||||||
Product recall | — | (212 | ) | (3,371 | ) | |||||||
Depreciation and amortization | 24,910 | 19,003 | 17,399 | |||||||||
Intangible asset impairment | — | 173,000 | 98,300 | |||||||||
Operating income (loss) | $ | 29,085 | $ | (152,631 | ) | $ | (5,084 | ) | ||||
Interest expense | 25,929 | 24,630 | 24,826 | |||||||||
Other expense (income), net | 2,708 | 1,619 | (671 | ) | ||||||||
Income tax (benefit) expense | (27,747 | ) | (69,098 | ) | (9,691 | ) | ||||||
Net income (loss) | $ | 28,195 | $ | (109,782 | ) | $ | (19,548 | ) |
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | |||||||||
Depreciation and amortization: | ||||||||||||
Direct | $ | 22,279 | $ | 15,877 | $ | 13,916 | ||||||
Retail | 1,277 | 1,674 | 2,029 | |||||||||
Corporate/other | 1,354 | 1,452 | 1,454 | |||||||||
Total Depreciation and amortization | $ | 24,910 | $ | 19,003 | $ | 17,399 |
(in thousands) | February 2, 2018 | January 27, 2017 | ||||||
Total assets: | ||||||||
Direct | $ | 856,986 | $ | 805,201 | ||||
Retail | 49,933 | 69,792 | ||||||
Corporate/other | 217,216 | 239,398 | ||||||
Total assets | $ | 1,124,135 | $ | 1,114,391 |
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | |||||||||
Capital expenditures: | ||||||||||||
Direct | $ | 37,893 | $ | 32,590 | $ | 21,630 | ||||||
Retail | 123 | 635 | 318 | |||||||||
Corporate/other | 129 | 94 | 276 | |||||||||
Total capital expenditures | $ | 38,145 | $ | 33,319 | $ | 22,224 |
(in thousands) | Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | |||||||||
Net revenue: | ||||||||||||
United States | $ | 1,204,199 | $ | 1,143,529 | $ | 1,211,226 | ||||||
Europe | 134,543 | 125,410 | 136,890 | |||||||||
Asia | 48,704 | 50,030 | 51,808 | |||||||||
Other foreign | 19,231 | 16,791 | 19,854 | |||||||||
Total Net revenue | $ | 1,406,677 | $ | 1,335,760 | $ | 1,419,778 |
(in thousands) | February 2, 2018 | January 27, 2017 | ||||||
Property and equipment, net: | ||||||||
United States | $ | 126,015 | $ | 113,045 | ||||
Europe | 9,862 | 9,075 | ||||||
Asia | 624 | 716 | ||||||
Total Property and equipment, net | $ | 136,501 | $ | 122,836 |
Fiscal 2017 | |||||||||||||||||||||||||||
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 | $ | 268,365 | 100.0 | % | $ | 302,190 | 100.0 | % | $ | 325,489 | 100.0 | % | $ | 510,633 | 100.0 | % | |||||||||||
Gross profit | 122,643 | 45.7 | % | 134,165 | 44.4 | % | 141,974 | 43.6 | % | 198,421 | 38.9 | % | |||||||||||||||
Operating (loss) income | (6,720 | ) | (2.5 | )% | 174 | 0.1 | % | 5,941 | 1.8 | % | 29,690 | 5.8 | % | ||||||||||||||
Net (loss) income(3) | $ | (7,839 | ) | (2.9 | )% | $ | (3,880 | ) | (1.3 | )% | $ | 162 | — | % | $ | 39,752 | 7.8 | % | |||||||||
Basic (loss) earnings per common share(1) | $ | (0.24 | ) | $ | (0.12 | ) | $ | 0.01 | $ | 1.24 | |||||||||||||||||
Diluted (loss) earnings per common share(1) | $ | (0.24 | ) | $ | (0.12 | ) | $ | 0.01 | $ | 1.24 |
Fiscal 2016 | |||||||||||||||||||||||||||
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 | $ | 273,433 | 100.0 | % | $ | 292,010 | 100.0 | % | $ | 311,476 | 100.0 | % | $ | 458,841 | 100.0 | % | |||||||||||
Gross profit | 129,670 | 47.4 | % | 136,152 | 46.6 | % | 133,651 | 42.9 | % | 176,935 | 38.6 | % | |||||||||||||||
Operating (loss) income(2) | (3,486 | ) | (1.3 | )% | 2,712 | 0.9 | % | (3,423 | ) | (1.1 | )% | (148,434 | ) | (32.3 | )% | ||||||||||||
Net loss(2) | $ | (5,759 | ) | (2.1 | )% | $ | (1,980 | ) | (0.7 | )% | $ | (7,222 | ) | (2.3 | )% | $ | (94,821 | ) | (20.7 | )% | |||||||
Basic loss per common share(1) | $ | (0.18 | ) | $ | (0.06 | ) | $ | (0.23 | ) | $ | (2.96 | ) | |||||||||||||||
Diluted loss per common share(1) | $ | (0.18 | ) | $ | (0.06 | ) | $ | (0.23 | ) | $ | (2.96 | ) |
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 | 443 | 22.00 | 1,412 | |||
Equity compensation plans not approved by security holders(1) | 412 | 18.10 | — | |||
Total | 855 | 18.66 | 1,412 |
* | Represents shares of common stock that may be issued pursuant to the Lands' End, Inc. 2014 Stock Plan as amended (the "2014 Stock Plan") and the Lands' End, Inc. 2017 Stock Plan (the "2017 Stock Plan"). Awards under the 2014 Stock Plan and 2017 Stock Plan may be restricted stock, stock unit awards, incentive stock options, nonqualified stock options, stock appreciation rights, or certain other stock-based awards. |
(1) | In connection with commencing employment, on March 6, 2017, the current CEO was granted options to purchase 294,118 shares of the Company’s common stock and 117,647 restricted stock units. These awards were made as inducement grants outside of our stockholder approved stock plans in accordance with NASDAQ Listing Rule 5635(c)(4). |
Exhibit Number | Exhibit Description | ||
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. 001-09769)). | |||
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)). | |||
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)). | |||
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)). | |||
ABL Credit Agreement, dated as of November 16, 2017, by and between Lands' End, Inc. (as the Lead Borrower), Wells Fargo Bank, N.A. (as Agent, L/C Issuer and Swing Line Lender), the Other Lenders party thereto, Wells Fargo Bank, N.A. (as Sole Lead Arranger and Sole Bookrunner) and BMO Harris Bank, N.A. (as Syndication Agent), and SunTrust Bank (as Documentation Agent). | |||
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)). | |||
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)). | |||
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 4.4 to the Company's Current Report on Form 8-K filed on April 8, 2014 (File No. 001-09769)). | |||
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)). | |||
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) | |||
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) | |||
Second Amendment to Master Lease Agreement, by and between Sears, Roebuck and Co. and Lands' End, Inc., dated February 1, 2018. (2) | |||
Master Sublease Agreement, dated February 1, 2018, by and between Sears Operations LLC and Lands' End, Inc.. (2) |
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) | |||
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) | |||
Second Amendment to Master Sublease Agreement, dated February 1, 2018, by and between Sears, Roebuck and Co. and Lands' End, Inc. (2) | |||
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)). | |||
Shop Your WaySM 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) | |||
Shop Your WaySM Retail Establishment Agreement First Amendment, dated as of October 21, 2014, by and between Sears Holdings Management Corporation and Lands' End, Inc. (2) | |||
Shop Your WaySM Retail Establishment Agreement Amendment 2, dated as of April 4, 2017, by and between Sears Holdings Management Corporation and Lands' End, Inc. (2) | |||
Shop Your WaySM Retail Establishment Agreement Amendment 3, dated as of May 2, 2017, by and between Sears Holdings Management Corporation and Lands' End, Inc. (2) | |||
Shop Your WaySM Retail Establishment Agreement Amendment 4, dated as of June 5, 2017, by and between Sears Holdings Management Corporation and Lands' End, Inc. (2) | |||
Shop Your WaySM Retail Establishment Agreement Amendment 5, dated as of June 29, 2017, by and between Sears Holdings Management Corporation and Lands' End, Inc. (2) | |||
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)). | |||
Director Compensation Policy effective as of May 10, 2017 (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended April 28, 2017 (File No. 001-09769)).** | |||
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)).** | |||
Lands' End, Inc. 2017 Stock Plan. (incorporated by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K for the fiscal year ended January 27, 2017 (File No. 001-09769)).** | |||
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)).** | |||
Form of Restricted Stock Unit Award Agreement (Timed-Based).** | |||
Form of Performance-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on February 14, 2018 (File No. 001-09769)).** | |||
Form of Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on September 1, 2017 (File No. 001-09769)). ** | |||
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)).** | |||
2017 Additional Definition 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 February 2, 2017 (File No. 001-09769)).** | |||
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 30, 2015 (File No. 001-09769)).** | |||
2017 Additional Definition Under Lands' End, Inc. Long-Term Incentive Program (As Amended and Restated) (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 12, 2017 (File No. 001-09769)).** |
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)).** | |||
Letter from Lands' End, Inc. to Jerome S. Griffith relating to employment, dated December 19, 2016. (incorporated by reference to Exhibit 10.26 to the Company's Annual Report on Form 10-K for the fiscal year ended January 27, 2017 (File No. 001-09769)).** | |||
Executive Severance Agreement dated and effective as of December 19, 2016 between Lands' End, Inc. and its affiliates and subsidiaries and Jerome S. Griffith. (incorporated by reference to Exhibit 10.27 to the Company's Annual Report on Form 10-K for the fiscal year ended January 27, 2017 (File No. 001-09769)).** (1) | |||
Sign-on Restricted Stock Unit Agreement dated and effective as of March 6, 2017 between Lands' End, Inc. and Jerome S. Griffith. (incorporated by reference to Exhibit 10.28 to the Company's Annual Report on Form 10-K for the fiscal year ended January 27, 2017 (File No. 001-09769)).** | |||
Sign-on Nonqualified Stock Option Agreement dated and effective as of March 6, 2017 between Lands' End, Inc. and Jerome S. Griffith. (incorporated by reference to Exhibit 10.29 to the Company's Annual Report on Form 10-K for the fiscal year ended January 27, 2017 (File No. 001-09769)).** | |||
Letter from Lands' End, Inc. to James Gooch relating to employment, dated January 26, 2016 and effective as of January 27, 2016 (incorporated by reference to Exhibit 10.28 to the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 2016 (File No. 001-09769)).** | |||
Letter from Lands' End, Inc. to James Gooch relating to employment, dated December 20, 2016. (incorporated by reference to Exhibit 10.31 to the Company's Annual Report on Form 10-K for the fiscal year ended January 27, 2017 (File No. 001-09769)).** | |||
Letter from Lands' End, Inc. to James Gooch relating to employment, dated March 29, 2017. (incorporated by reference to Exhibit 10.48 to the Company's Annual Report on Form 10-K for the fiscal year ended January 27, 2017 (File No. 001-09769)).** | |||
Executive Severance Agreement dated and effective as of January 27, 2016 between Lands' End, Inc. and its affiliates and subsidiaries and James Gooch (incorporated by reference to Exhibit 10.29 to the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 2016 (File No. 001-09769)).** (1) | |||
Restricted Stock Unit Agreement dated and effective as of January 27, 2016 between Lands' End, Inc. and James Gooch. (incorporated by reference to Exhibit 10.30 to the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 2016 (File No. 001-09769)).** | |||
Compensation Committee Resolutions dated September 23, 2016 regarding Co-Interim Chief Executive Officer Compensation (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended October 28, 2016 (File No. 001-09769)).** | |||
Letter from Lands' End, Inc. to Joseph M. Boitano relating to employment, dated June 1, 2015. (incorporated by reference to Exhibit 10.35 to the Company's Annual Report on Form 10-K for the fiscal year ended January 27, 2017 (File No. 001-09769)). ** | |||
Executive Severance Agreement dated and effective as of June 8, 2015 between Lands' End, Inc. and its affiliates and subsidiaries and Joseph M. Boitano. (incorporated by reference to Exhibit 10.36 to the Company's Annual Report on Form 10-K for the fiscal year ended January 27, 2017 (File No. 001-09769)). **(1) | |||
Letter from Lands' End, Inc. to Rebecca L. Gebhardt relating to employment, dated March 25, 2014. (incorporated by reference to Exhibit 10.37 to the Company's Annual Report on Form 10-K for the fiscal year ended January 27, 2017 (File No. 001-09769)).** | |||
Letter from Lands' End, Inc. to Rebecca L. Gebhardt relating to employment, dated June 16, 2016. (incorporated by reference to Exhibit 10.38 to the Company's Annual Report on Form 10-K for the fiscal year ended January 27, 2017 (File No. 001-09769)).** | |||
Executive Severance Agreement dated and effective as of August 5, 2014 between Lands' End, Inc. and its affiliates and subsidiaries and Rebecca L. Gebhardt. (incorporated by reference to Exhibit 10.39 to the Company's Annual Report on Form 10-K for the fiscal year ended January 27, 2017 (File No. 001-09769)).** (1) | |||
Letter from Lands' End, Inc. to Peter L. Gray relating to employment, dated April 21, 2017. (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended April 28, 2017 (File No. 001-09769)).** |
Executive Severance Agreement dated and effective as of April 21, 2017 between Lands' End, Inc. and its affiliates and subsidiaries and Peter L. Gray. (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended April 28, 2017 (File No. 001-09769)).** | |||
Letter from Lands' End, Inc. to Gill Brown Hong relating to employment, dated November 13, 2017.** | |||
Executive Severance Agreement dated and effective as of November 2, 2017 between Lands' End, Inc. and its affiliates and subsidiaries and Gill Brown Hong.** | |||
Letter from Lands' End, Inc. to Scott Hyatt relating to employment, dated June 9, 2015 (incorporated by reference to Exhibit 10.36 to the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 2016 (File No. 001-09769)). ** | |||
Executive Severance Agreement dated and effective as of June 29, 2015 between Lands' End, Inc. and its affiliates and subsidiaries and Scott Hyatt (incorporated by reference to Exhibit 10.37 to the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 2016 (File No. 001-09769)).** (1) | |||
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) | |||
Subsidiaries of Lands' End, Inc. | |||
Consent of Deloitte & Touche LLP. | |||
Certification of Chief Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended. | |||
Certification of Chief Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended. | |||
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.*** | |||
101.INS | XBRL Instance Document | ||
101.SCH | XBRL Taxonomy Extension Schema Document | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.DEF | XBRL Taxonomy Extension Definition Document | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ||
* | Filed herewith. | ||
** | A management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(b) of Form 10-K. | ||
*** | This exhibit shall be deemed to be "furnished" and not "filed." | ||
(1) | Confidential treatment was granted as to omitted portions of this exhibit. The omitted material has been filed separately with the Securities and Exchange Commission. | ||
(2) | Confidential treatment requested as to certain terms in this exhibit; these terms have been omitted from this filing and filed separately with the Securities and Exchange Commission. |
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: | March 29, 2018 |
Signature: | Date: | |||||
/s/ Jerome S. Griffith | Director, Chief Executive Officer and President (Principal Executive Officer) | March 29, 2018 | ||||
Jerome S. Griffith | ||||||
/s/ James F. Gooch | Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer (Principal Financial Officer) | March 29, 2018 | ||||
James F. Gooch | ||||||
/s/ Bernard L. McCracken | Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer) | March 29, 2018 | ||||
Bernard L. McCracken | ||||||
/s/ Josephine Linden | Chairman of the Board of Directors | March 29, 2018 | ||||
Josephine Linden | ||||||
/s/ Robert Galvin | Director | March 29, 2018 | ||||
Robert Galvin | ||||||
/s/ Elizabeth Leykum | Director | March 29, 2018 | ||||
Elizabeth Leykum | ||||||
/s/ John T. McClain | Director | March 29, 2018 | ||||
John T. McClain | ||||||
/s/ Jignesh Patel | Director | March 29, 2018 | ||||
Jignesh Patel | ||||||
/s/ Jonah Staw | Director | March 29, 2018 | ||||
Jonah Staw | ||||||
Exhibit 4.2 |
TABLE OF CONTENTS | ||||||
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS | 1 | |||||
1.01 | Defined Terms | 1 | ||||
1.02 | Other Interpretive Provisions | 55 | ||||
1.03 | Accounting Terms | 56 | ||||
1.04 | Reserved | 57 | ||||
1.05 | Rounding | 57 | ||||
1.06 | Times of Day | 57 | ||||
1.07 | Letter of Credit Amounts | 57 | ||||
1.08 | Currency Equivalents Generally | 57 | ||||
ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS | 58 | |||||
2.01 | Committed Loans; Reserves | 58 | ||||
2.02 | Borrowings, Conversions and Continuations of Committed Loans | 59 | ||||
2.03 | Letters of Credit | 61 | ||||
2.04 | Swing Line Loans | 69 | ||||
2.05 | Prepayments | 71 | ||||
2.06 | Termination or Reduction of Commitments | 72 | ||||
2.07 | Repayment of Obligations | 73 | ||||
2.08 | Interest | 73 | ||||
2.09 | Fees | 73 | ||||
2.10 | Computation of Interest and Fees | 74 | ||||
2.11 | Evidence of Debt | 74 | ||||
2.12 | Payments Generally; Agent’s Clawback | 74 | ||||
2.13 | Sharing of Payments by Lenders | 76 | ||||
2.14 | Settlement Amongst Lenders | 77 | ||||
2.15 | Increase in Commitments | 77 | ||||
2.16 | Defaulting Lenders | 79 | ||||
2.17 | Extensions of Loans. | 82 | ||||
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY | 85 | |||||
3.01 | Taxes | 85 | ||||
3.02 | Illegality | 88 | ||||
3.03 | Inability to Determine Rates | 89 | ||||
3.04 | Increased Costs; Reserves on LIBOR Rate Loans | 89 | ||||
3.05 | Compensation for Losses | 91 | ||||
3.06 | Mitigation Obligations; Replacement of Lenders | 91 | ||||
3.07 | Designation of Lead Borrower as Borrowers’ Agent | 92 | ||||
3.08 | Survival | 92 | ||||
ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS | 92 | |||||
4.01 | Conditions of Initial Credit Extension | 92 | ||||
4.02 | Conditions to all Credit Extensions | 95 | ||||
ARTICLE V REPRESENTATIONS AND WARRANTIES | 96 | |||||
5.01 | Existence, Qualification and Power | 96 | ||||
5.02 | Authorization; No Contravention | 96 | ||||
5.03 | Governmental Authorization; Other Consents | 96 | ||||
5.04 | Binding Effect | 97 | ||||
5.05 | Financial Statements; No Material Adverse Effect | 97 | ||||
(i) |
5.06 | Litigation | 97 | ||||
5.07 | Reserved | 97 | ||||
5.08 | Ownership of Property; Liens | 97 | ||||
5.09 | Environmental Compliance | 98 | ||||
5.10 | Insurance | 98 | ||||
5.11 | Taxes | 99 | ||||
5.12 | ERISA Compliance | 99 | ||||
5.13 | Subsidiaries; Equity Interests | 100 | ||||
5.14 | Margin Regulations; Investment Company Act | 100 | ||||
5.15 | Disclosure | 100 | ||||
5.16 | Compliance with Laws | 101 | ||||
5.17 | Intellectual Property; Licenses, Etc | 101 | ||||
5.18 | Labor Matters | 101 | ||||
5.19 | Security Documents | 101 | ||||
5.20 | Solvency | 102 | ||||
5.21 | Deposit Accounts; Credit Card Arrangements | 102 | ||||
5.22 | Brokers | 102 | ||||
5.23 | Customer and Trade Relations | 102 | ||||
5.24 | Material Contracts | 102 | ||||
5.25 | Casualty | 102 | ||||
5.26 | OFAC/Sanctions | 103 | ||||
ARTICLE VI AFFIRMATIVE COVENANTS | 103 | |||||
6.01 | Financial Statements | 103 | ||||
6.02 | Certificates; Other Information | 104 | ||||
6.03 | Notices | 106 | ||||
6.04 | Payment of Obligations | 107 | ||||
6.05 | Preservation of Existence, Etc | 107 | ||||
6.06 | Maintenance of Properties | 107 | ||||
6.07 | Maintenance of Insurance | 107 | ||||
6.08 | Compliance with Laws | 108 | ||||
6.09 | Books and Records; Accountants | 108 | ||||
6.10 | Inspection Rights | 109 | ||||
6.11 | Additional Loan Parties | 109 | ||||
6.12 | Cash Management | 110 | ||||
6.13 | Information Regarding the Collateral | 112 | ||||
6.14 | Physical Inventories | 112 | ||||
6.15 | Designation of Subsidiaries | 112 | ||||
6.16 | Further Assurances | 113 | ||||
6.17 | Compliance with Terms of Leaseholds | 113 | ||||
6.18 | Material Contracts | 114 | ||||
ARTICLE VII NEGATIVE COVENANTS | 114 | |||||
7.01 | Liens | 114 | ||||
7.02 | Investments | 114 | ||||
7.03 | Indebtedness | 114 | ||||
7.04 | Fundamental Changes | 114 | ||||
7.05 | Dispositions | 115 | ||||
7.06 | Restricted Payments | 115 | ||||
7.07 | Prepayments of Indebtedness | 116 | ||||
7.08 | Change in Nature of Business | 117 | ||||
(ii) |
7.09 | Transactions with Affiliates | 117 | ||||
7.10 | Burdensome Agreements | 118 | ||||
7.11 | Use of Proceeds | 119 | ||||
7.12 | Amendment of Organization Documents and Material Indebtedness | 119 | ||||
7.13 | Fiscal Year; Accounting Policies | 119 | ||||
7.14 | Financial Covenant | 119 | ||||
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES | 119 | |||||
8.01 | Events of Default | 119 | ||||
8.02 | Remedies Upon Event of Default | 121 | ||||
8.03 | Application of Funds | 122 | ||||
ARTICLE IX THE AGENT | 123 | |||||
9.01 | Appointment and Authority | 123 | ||||
9.02 | [Reserved] | 124 | ||||
9.03 | Rights as a Lender | 124 | ||||
9.04 | Exculpatory Provisions | 124 | ||||
9.05 | Reliance by Agent | 125 | ||||
9.06 | Delegation of Duties | 125 | ||||
9.07 | Resignation of Agent | 125 | ||||
9.08 | Non-Reliance on Agent and Other Lenders | 126 | ||||
9.09 | No Other Duties, Etc | 126 | ||||
9.10 | Agent May File Proofs of Claim | 126 | ||||
9.11 | Collateral and Guaranty Matters | 127 | ||||
9.12 | Notice of Transfer | 128 | ||||
9.13 | Reports and Financial Statements | 128 | ||||
9.14 | Agency for Perfection | 129 | ||||
9.15 | Indemnification of Agent | 129 | ||||
9.16 | Relation among Lenders | 129 | ||||
ARTICLE X MISCELLANEOUS | 129 | |||||
10.01 | Amendments, Etc | 131 | ||||
10.02 | Notices; Effectiveness; Electronic Communications | 133 | ||||
10.03 | No Waiver; Cumulative Remedies | 133 | ||||
10.04 | Expenses; Indemnity; Damage Waiver | 135 | ||||
10.05 | Payments Set Aside | 135 | ||||
10.06 | Successors and Assigns | 135 | ||||
10.07 | Treatment of Certain Information; Confidentiality | 139 | ||||
10.08 | Right of Setoff | 140 | ||||
10.09 | Interest Rate Limitation | 140 | ||||
10.10 | Counterparts; Integration; Effectiveness | 140 | ||||
10.11 | Survival | 141 | ||||
10.12 | Severability | 141 | ||||
10.13 | Replacement of Lenders | 141 | ||||
10.14 | Governing Law; Jurisdiction; Etc | 142 | ||||
10.15 | Waiver of Jury Trial | 143 | ||||
10.16 | No Advisory or Fiduciary Responsibility | 143 | ||||
10.17 | USA PATRIOT Act Notice | 143 | ||||
10.01 | Foreign Asset Control Regulations | 144 | ||||
10.01 | Time of the Essence | 144 | ||||
10.01 | Press Releases | 144 | ||||
(iii) |
10.21 | Releases | 144 | ||||
10.22 | No Strict Construction | 145 | ||||
10.23 | Attachments | 145 | ||||
10.24 | Electronic Execution of Assignments and Certain Other Documents | 145 | ||||
10.25 | Intercreditor Agreement | 146 | ||||
10.26 | Additional Waivers | 146 | ||||
10.27 | Keepwell | 147 | ||||
10.28 | Acknowledgement and Consent to Bail-In of EEA Financial Institutions | 147 | ||||
SIGNATURES | S-1 | |||||
(iv) |
SCHEDULES | ||||||
1.01 | Borrowers | |||||
1.02 | Guarantors | |||||
1.03 | Existing BAML Indebtedness | |||||
1.05 | Account Debtors | |||||
2.01 | Commitments and Applicable Percentages | |||||
5.18 | Collective Bargaining Agreements | |||||
6.02 | Financial and Collateral Reporting | |||||
6.12 | Blocked Account Banks | |||||
6.16 | Post-Closing Actions | |||||
7.01 | Existing Liens | |||||
7.02 | Existing Investments | |||||
7.03 | Existing Indebtedness | |||||
7.09 | Affiliate Transactions | |||||
10.02 | Agent’s Office; Certain Addresses for Notices | |||||
EXHIBITS | ||||||
Form of | ||||||
A | LIBOR Rate Loan Notice | |||||
B-1 | Revolving Note | |||||
B-2 | Swing Line Note | |||||
C | Compliance Certificate | |||||
D | Assignment and Assumption | |||||
E | Borrowing Base Certificate | |||||
F-1 | U.S. Tax Compliance Certificate (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes) | |||||
F-2 | U.S. Tax Compliance Certificate (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes) | |||||
F-3 | U.S. Tax Compliance Certificate (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes) | |||||
F-4 | U.S. Tax Compliance Certificate (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes) | |||||
G | Credit Card Notification | |||||
H | Intercompany Note | |||||
(v) |
Level | Average Daily Availability | Applicable Margin for LIBOR Rate Loans | Applicable Margin for Base Rate Loans | Commercial Letter of Credit Fee | Standby Letter of Credit Fee |
I | Equal to or greater than 66.67% of the Loan Cap | 1.25% | 0.50% | 0.625% | 1.25% |
II | Equal to or greater than 33.33% of the Loan Cap but less than 66.67% of the Loan Cap | 1.50% | 0.75% | 0.75% | 1.50% |
III | Less than 33.33% of the Loan Cap | 1.75% | 1.00% | 0.875% | 1.75% |
[remainder of page intentionally left blank] |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first above written. | |||||
LANDS’ END, INC., as Lead Borrower and a Borrower | |||||
By: /s/ James F. Gooch | |||||
Name: James F. Gooch | |||||
Title: Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer | |||||
LANDS’ END DIRECT MERCHANTS, INC. as a Guarantor | |||||
By: /s/ James F. Gooch | |||||
Name: James F. Gooch | |||||
Title: President, Chief Financial Officer and Treasurer | |||||
LANDS’ END INTERNATIONAL, INC. as a Guarantor | |||||
By: /s/ James F. Gooch | |||||
Name: James F. Gooch | |||||
Title: President and Treasurer | |||||
LANDS’ END JAPAN, INC. as a Guarantor | |||||
By: /s/ James F. Gooch | |||||
Name: James F. Gooch | |||||
Title: President and Treasurer | |||||
LANDS’ END PUBLISHING, LLC as a Guarantor | |||||
By: /s/ James F. Gooch | |||||
Name: James F. Gooch | |||||
Title: Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer | |||||
LEGC, LLC as a Guarantor | |||||
By: /s/ James F. Gooch | |||||
Name: James F. Gooch | |||||
Title: Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer | |||||
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent, L/C Issuer, Swing Line Lender and as a Lender | ||||
By: /s/ Y. Sonia Anandraj | ||||
Name: Y. Sonda Anadraj | ||||
Title: Authorized Officer | ||||
CITIZENS BANK, N.A., as a Lender | ||||
By: /s/ Christine Scott | ||||
Name: Christine Scott | ||||
Title: Senior Vice President | ||||
SUNTRUST BANK, as a Lender | ||||
By: /s/ Matney Gornall | ||||
Name: Matney Gornall | ||||
Title: Vice President | ||||
BMO HARRIS BANK N.A., as a Lender | ||||
By: /s/ Jason Hoefler | ||||
Name: Jason Hoefler | ||||
Title: Managing Director | ||||
JPMORGAN CHASE BANK N.A., as a Lender | ||||
By: /s/ Robert S. Sheppard | ||||
Name: Robert S. Sheppard | ||||
Title: Executive Director | ||||
Schedule 1.03 | ||||
Existing BAML Indebtedness |
Letters of Credit | ||||||||
Standby | ||||||||
Instrument # | L/C Issuer | Account Party | Beneficiary | Outstanding Amount | Liability (In USD) | Issue Date | Letter of Credit Amount | Expiry Date |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Lameirinho-Industrias Textile SA | 1,500,000.00 | 1,500,000.00 | 06/26/2017 | 2,200,000.00 | 01/30/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Bank of America | 757,000.00 | 757,000.00 | 09/12/2017 | 757,000.00 | 01/31/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Sentry Insurance A Mutual Company | 3,100,000.00 | 3,100,000.00 | 04/18/2017 | 3,100,000.00 | 02/02/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | The Travelers Indemnity Company | 2,300,000.00 | 2,300,000.00 | 04/22/2017 | 2,300,000.00 | 04/19/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Aspen American Insurance Company | 2,200,000.00 | 2,200,000.00 | 07/30/2018 | 1,500,000.00 | 07/30/2018 |
Total Standby Letters of Credit | 9,857,000.00 | |||||||
Documentary | |||||||
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 2,197.66 | 2,197.66 | 08/24/2017 | 11/06/2017 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 7,063.13 | 7,063.13 | 08/31/2017 | 11/20/2017 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 85,746.72 | 85,746.72 | 08/24/2017 | 11/27/2017 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 476,991.30 | 476,991.30 | 09/12/2017 | 11/27/2017 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 17,700.19 | 17,700.19 | 09/12/2017 | 11/27/2017 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 1,419.61 | 1,419.61 | 09/12/2017 | 12/4/2017 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 97,805.01 | 97,805.01 | 10/04/2017 | 12/27/2017 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 1,132,603.79 | 1,132,603.79 | 10/04/2017 | 12/27/2017 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 46,055.63 | 46,055.63 | 10/20/2017 | 1/8/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 1,309,242.03 | 1,309,242.03 | 08/30/2017 | 1/10/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 265,005.07 | 265,005.07 | 10/20/2017 | 1/10/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 56,914.23 | 56,914.23 | 11/03/2017 | 1/24/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 14,038.98 | 14,038.98 | 10/11/2017 | 1/29/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 69,989.23 | 69,989.23 | 10/12/2017 | 1/29/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 109,594.14 | 109,594.14 | 10/17/2017 | 1/29/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 16,502.84 | 16,502.84 | 10/25/2017 | 1/29/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 166,127.65 | 166,127.65 | 11/07/2017 | 1/29/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 1,111,051.93 | 1,111,051.93 | 11/07/2017 | 1/29/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 957,195.55 | 957,195.55 | 11/07/2017 | 1/31/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 101,579.54 | 101,579.54 | 10/11/2017 | 2/5/2018 |
[Account Number Omitted] | Bank of America, N.A. | Lands’ End, Inc. | Legend Swimwear Factory | 293,912.98 | 293,912.98 | 11/03/2017 | 2/19/18 |
Total Documentary Letters of Credit | 6,338,737.21 |
Bank Guarantees | |||||||
Instrument # | Product | Account Party | Beneficiary | Oustanding Amount | Liability (In USD) | Issue Date | Expiry Date |
[Account Number Omitted] | Non Tradeline | Lands’ End, Inc. | H M REVENUE AND CUSTOMS | 1,842,680.00 | 1,842,680.00 | 10/14/2015 | 04/04/2019 |
Total Guarantees | 1,842,680.00 |
Schedule 1.05 | ||||
Account Debtors | ||||
Alaska Airlines, Inc | ||||
AT&T, Inc | ||||
Avis Budget Group, Inc | ||||
JPMorgan Chase Bank, National Association | ||||
Southwest Airlines Co | ||||
Verizon Sourcing LLC | ||||
Delta Air Lines, Inc | ||||
Caterpillar Inc | ||||
Discover Financial Services | ||||
State Farm Mutual Automobile Insurance Company | ||||
United Parcel Service Inc |
Schedule 2.01 | ||||
Commitments and Applicable Percentages |
Lender | Commitment | Applicable Percentage | ||
Wells Fargo Bank, National Association | $ | 67,000,000 | 38.285714286% | |
SunTrust Bank | $ | 32,000,000 | 18.285714286% | |
BMO Harris Bank, N.A. | $ | 32,000,000 | 18.285714286% | |
JPMorgan Chase Bank, N.A. | $ | 22,000,000 | 12.571428571% | |
Citizens Bank, N.A. | $ | 22,000,000 | 12.571428571% | |
Total: | $ | 175,000,000 | 100.000000000% |
Schedule 5.18 | ||||
Collective Bargaining Agreements | ||||
None. |
Schedule 6.02 | ||||
Financial and Collateral Reporting | ||||
[see attached] |
Lands’ End, Inc. Reporting Requirements | |
A. Due on 10th Business Day of each Fiscal Month(1) | |
1. Borrowing Base Certificate showing the Borrowing Base for the prior month: | |
Borrowing Base backup to be received with the BBC: | |
=- Summary source document of Inventory by category | |
=- Summary source document of In-Transit Inventory | |
=- Summary source document of Inventory ineligibles | |
=- Summary source document of Credit Card Receivables | |
=- Summary source document of Credit Card Receivables ineligibles | |
=- Summary source document of Availability Reserves | |
=- Summary source document of accounts receivable aging | |
B. Within 30 days after the end of each fiscal month during which Availability is, at any time, less than the greater of (i) $131,250,000 and (ii) 80% of the Loan Cap | |
1. Unaudited Financial statements including: | |
=- Consolidated balance sheets of the Lead Borrower and its Subsidiaries | |
=- Consolidated statements of income or Operations of the Lead Borrower its Subsidiaries | |
=- Consolidated cash flows of Lead Borrower and its Subsidiaries | |
=- Consolidated Shareholders’ Equity of Lead Borrower and its Subsidiaries | |
=- Consolidating financial statements reflecting adjustments necessary to eliminate accounts of Unrestricted Subsidiaries (if any) from Consolidated financial statements | |
Borrowing Base Availability | |
2. Compliance Certificate | |
C. Within 50 days after the end of each Fiscal Quarter of each Fiscal Year | |
1. Financial statements including: | |
=- Consolidated balance sheets of the Lead Borrower and its Subsidiaries | |
=- Consolidated statements of income or Operations of the Lead Borrower and its Subsidiaries | |
=- Consolidated cash flows of the Lead Borrower and its Subsidiaries | |
=- Consolidated Shareholders’ Equity of the Lead Borrower and its Subsidiaries | |
=- Consolidating financial statements reflecting adjustments necessary to eliminate accounts of Unrestricted Subsidiaries (if any) from Consolidated financial statements | |
Borrowing Base Availability | |
2. Compliance Certificate | |
D. Within 60 days after the end of each Fiscal Year | |
1. Forecasts of: | |
=- Projected Monthly Availability | |
=- Consolidated forecasted balance sheets of the Lead Borrower and its Subsidiaries | |
=- Consolidated statements of income or operations of the Lead Borrower and its Subsidiaries | |
=- Consolidated cash flows of the Lead Borrower and its Subsidiaries | |
E. Within 95 days after the end of each Fiscal Year | |
1. Audited financial statements including: | |
=- Consolidated balance sheet of the Lead Borrower and its Subsidiaries | |
=- Consolidated statements of income or operations of the Lead Borrower and its Subsidiaries | |
=- Consolidated Shareholders’ Equity of the Lead Borrower and its Subsidiaries | |
=- Consolidated cash flows of the Lead Borrower and its Subsidiaries |
=- Consolidating financial statements reflecting adjustments necessary to eliminate accounts of Unrestricted Subsidiaries (if any) from Consolidated financial statements | |
2. Compliance Certificate | |
3. Certificate of Registered Public Accounting Firm | |
4. Insurance coverage summary report | |
(1) Provided that if Accelerated Borrowing Base Delivery Event has occurred and is continuing, due on Friday (or, if Friday is not a Business Day, on the next succeeding Business Day) of each week, as of the close of business on the immediately preceding Friday. |
Schedule 6.12 | ||||
Blocked Account Banks | ||||
Account Owner | Account Number | Type of Account | Name & Address of Financial Institutions | Blocked Account |
Lands' End, Inc. | [Account Number Omitted] | Master Account - Inlet Account | BMO/Harris One West Main Street Madison, WI 53703 | Yes |
Lands' End, Inc. | [Account Number Omitted] | Core and retail sales deposit - ZBA Account | BMO/Harris One West Main Street Madison, WI 53703 | Yes |
Lands' End, Inc. | [Account Number Omitted] | LEBO deposits - ZBA Account | BMO/Harris One West Main Street Madison, WI 53703 | Yes |
Lands' End, Inc. | [Account Number Omitted] | MMDA Account | Citizens 71 S. Wacker Drive 29th Floor Chicago, IL 60606 | Yes |
Lands' End, Inc. | [Account Number Omitted] | Retail depository account | Citizens 71 S. Wacker Drive 29th Floor Chicago, IL 60606 | Yes |
Lands' End, Inc. | [Account Number Omitted] | MMDA Account | Suntrust Mail Code: FL-Tampa-4191, 401 E. Jackson Street Tampa, FL 33602 | Yes |
Schedule 6.16 | ||||
Post-Closing Actions | ||||
1. | On or prior to the date that is twenty (20) Business Days following the Closing Date, the Lead Borrower shall deliver, or cause to be delivered, to the Agent, the signature page of Sears Holdings Global Sourcing Ltd. to the Sears Tri-Party Agreement. | |||
2. | On or prior to the date that is thirty (30) days following the Closing Date, the Lead Borrower. shall deliver, or cause to be delivered, to the Agent, an executed Credit Card Notification to Citibank (South Dakota), N.A. | |||
3. | On or prior to the date that is sixty (60) days following the Closing Date, the Lead Borrower shall deliver, or cause to be delivered, to the Agent: a Blocked Account Agreement with the Blocked Account Banks listed below with respect to the accounts listed below: | |||
Blocked Account Bank | Account Number(s) ending in: | |||
Citizens Bank, National Association | [Account Number Omitted] | |||
SunTrust Bank | [Account Number Omitted] | |||
4. | Notwithstanding that the Borrowers have not delivered any Customs Broker/Carrier Agreements pursuant to clause (c) of the definition of “Eligible In-Transit Inventory” as of the date hereof, the Agent agrees that In-Transit Inventory which otherwise satisfies the eligibility requirements set forth in the definition of “Eligible In-Transit Inventory” shall be deemed Eligible In-Transit Inventory; provided, however, that if the Borrowers are unable to deliver any such Customs Broker/Carrier Agreements within a period of ninety (90) days after the Closing Date, the Agent shall be permitted to deem the applicable In-Transit Inventory not eligible for inclusion in the calculation of the Borrowing Base until such time as such In-Transit Inventory complies with the definition of “Eligible In-Transit Inventory” (but it shall not constitute a Default or an Event of Default under the Credit Agreement). |
Schedule 7.01 | |||||
Existing Liens | |||||
Restricted Subsidiary | Beneficiary of Lien | Date of Creation | Instrument Creating Change | Property Mortgaged or Charged | Amount Secured by Mortgage or Charge |
Lands’ End Europe Limited | Britannia Life Limited | July 7, 1999 | Rent Deposit Deed | All money standing to the credit of the charged account | All monies due and obligations to be performed pursuant to a lease dated Dec. 15th, 1997 between London and Regional (Bond Street) Limited and Lands’ End Europe Limited |
Schedule 7.02 | |||||
Existing Investments | |||||
None. |
Schedule 7.03 | |||||
Existing Indebtedness | |||||
None. |
Schedule 7.09 | |||||
Affiliate Transactions | |||||
Trademark and Trademark and Customer List License Agreement, between Lands’ End, Inc. and Lands’ End Direct Merchants U.K. Ltd, dated January 29, 2000. | |||||
Intercompany Purchasing Arrangement: Lands’ End Europe Limited and Lands’ End Japan KK (the “PO Entities”) each maintain control of their own purchasing arrangements and purchase orders. Pursuant to a shared services arrangement, Lands’ End, Inc. processes the purchase orders of the PO Entities, settles all payments on behalf of the PO Entities and invoices the PO Entities for such settled amounts, as applicable. |
Schedule 10.02 | |||||
Agent's Office; Certain Addresses for Notices | |||||
Agent, L/C Issuer and Swing Line Lender | |||||
Wells Fargo Bank, National Association | |||||
One Boston Place, 18th Floor | |||||
Boston, Massachusetts 02108 | |||||
Attention: Y. Sonia Anandraj | |||||
Telephone: 617-854-4353 | |||||
Facsimile: 855-842-6361 | |||||
Y.S.Anandraj@wellsfargo.com | |||||
with a copy to: | |||||
Choate Hall & Stewart LLP | |||||
Two International Place | |||||
Boston, MA 02110 | |||||
Attention: Jennifer Conway Fenn, Esquire | |||||
Telephone: (617) 248-4845 | |||||
Facsimile: (617) 502-4845 | |||||
E-mail: jfenn@choate.com | |||||
the Lead Borrower and the Other Loan Parties | |||||
c/o Lands’ End, Inc. | |||||
1 Lands’ End Lane | |||||
Dodgeville, Wisconsin 53595 | |||||
Attention: Robert C. Diamond, Assistant Treasurer | |||||
Telephone: (608) 935-6558 | |||||
E-mail: bob.diamond@landsend.com | |||||
Website: www.landsend.com | |||||
with a copy to: | |||||
c/o Lands’ End, Inc. | |||||
1 Lands’ End Lane | |||||
Dodgeville, Wisconsin 53595 | |||||
Attention: Peter L. Gray, Executive Vice President, Chief Administrative Officer and General Counsel | |||||
Telephone: (608) 935-4041 | |||||
E-mail: peter.gray@landsend.com |
EXHIBIT A | |||||
FORM OF LIBOR RATE LOAN NOTICE1 | |||||
Date: |
(a) On | (a Business Day)3 | ||||
(b) In the principal amount of $ | 4 | ||||
(c) With an Interest Period of | month(s)5 | ||||
The Lead Borrower hereby represents and warrants (a) the Committed Borrowing requested herein satisfies the requirements of Sections 2.02(b)6 and 2.02(g)7 of the Credit Agreement, and | |||||
1Base Rate Loans to be requested by electronic notice via the Portal, in accordance with Section 2.02 of the Credit Agreement. | |||||
2A Committed Borrowing must have the same Interest Period | |||||
3Each notice of a Committed Borrowing or a continuation of LIBOR Rate Loans must be received by the Agent not later than 11:00 a.m. Local Time three (3) Business Days prior to the requested date of any Borrowing of or continuation of LIBOR Rate Loans. | |||||
4Each Committed Borrowing, conversion to, or continuation of LIBOR Rate Loans must be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof. | |||||
5The Lead Borrower may request a Committed Borrowing of LIBOR Rate Loans with an Interest Period of one, two, three or six months. If no election of Interest Period is specified, then the Lead Borrower will be deemed to have specified an Interest Period of one month. | |||||
6In addition to the requirements set forth on this LIBOR Loan Notice, on the requested date of any LIBOR Rate Loan, (i) in the event that Base Rate Loans are outstanding in an amount equal to or greater than the requested LIBOR Rate Loan, all or a portion of such Base Rate Loans shall |
be automatically converted to a LIBOR Rate Loan in the amount requested by the Lead Borrower, and (ii) if Base Rate Loans are not outstanding in an amount at least equal to the requested LIBOR Rate Loan, the Lead Borrower shall make an electronic request via the Portal for additional Base Rate Loans in an such amount, when taken with the outstanding Base Rate Loans (which shall be converted automatically at such time), as is necessary to satisfy the requested LIBOR Rate Loan. If the Lead Borrower fails to make such additional request via the Portal as required pursuant to clause (ii) of the foregoing sentence, then the Borrowers shall be responsible for all amounts due pursuant to Section 3.05 of the Credit Agreement arising on account of such failure. If the Lead Borrower fails to give a timely notice with respect to any continuation of a LIBOR Rate Loan, then the applicable Committed Loans shall be converted to Base Rate Loans effective as of the last day of the Interest Period then in effect with respect to the applicable LIBOR Rate Loans. | ||||
7After giving effect to all Committed Borrowings, all conversions of Committed Loans from one Type to the other, and all continuations of Committed Loans as the same Type, there shall not be more than seven (7) Interest Periods in effect with respect to LIBOR Rate Loans. | ||||
LANDS’ END, INC., as Lead Borrower | |||||
By: | |||||
Name: | |||||
Title: | |||||
[Signature page to LIBOR Rate Loan Notice] |
EXHIBIT B-1 | ||||
FORM OF REVOLVING NOTE | ||||
REVOLVING NOTE | ||||
[$____________] | [________ ___,20___] | |||
[SIGNATURE PAGE FOLLOWS] | ||||
IN WITNESS WHEREOF, the Borrowers have each caused this Revolving Note to be duly executed as of the date set forth above. | |||||
BORROWERS: | |||||
LANDS’ END, INC., as Lead Borrower | |||||
By: | |||||
Name: | |||||
Title: | |||||
[Signature Page to Revolving Note] | |||||
EXHIBIT B-2 | ||||
FORM OF SWING LINE NOTE | ||||
SWING LINE NOTE | ||||
$20,000,000 | [________ ___,20___] | |||
[SIGNATURE PAGE FOLLOWS] | ||||
IN WITNESS WHEREOF, the Borrowers have each caused this Swing Line Note to be duly executed as of the date set forth above. | |||||
BORROWERS: | |||||
LANDS’ END, INC., as Lead Borrower | |||||
By: | |||||
Name: | |||||
Title: | |||||
[Signature Page to Swing Line Note] | |||||
EXHIBIT C | ||||
FORM OF COMPLIANCE CERTIFICATE | ||||
To: Wells Fargo Bank, National Association, as Agent | Date: | |||
One Boston Place, 18th Floor | ||||
Boston, Massachusetts 02108 | ||||
Attention: Y. Sonia Anandraj | ||||
1. | No Default. |
(a) | To the knowledge of the undersigned Responsible Officer, as of the date hereof and except as set forth in Appendix I, no Default or Event of Default has occurred and is continuing. |
(b) | If a Default or Event of Default has occurred and is continuing, the Lead Borrower proposes to take action as set forth in Appendix I with respect to such Default or Event of Default. |
2. | Financial Calculations. Attached hereto as Appendix II are reasonably detailed calculations demonstrating the Consolidated Fixed Charge Coverage Ratio (whether or not compliance therewith is then required under Section 7.14 of the Credit Agreement). |
3. | Financial Statements. |
(a) | Attached hereto as Appendix III (or, if not attached, delivered to the Agent in accordance with the penultimate paragraph of Section 6.02 of the Credit Agreement) are a Consolidated balance sheet of the Lead Borrower and its Subsidiaries as at the end of the Fiscal Quarter ended , and the related Consolidated statements of income or operations, Shareholders’ Equity, cash flows, and borrowing base availability for such Fiscal Quarter and for the portion of the Lead Borrower’s Fiscal Year then ended, setting forth in each case in comparative form the figures for the corresponding Fiscal Quarter of the previous Fiscal Year and (B) the corresponding portion |
(b) | Attached hereto as Appendix III (or, if not attached, delivered to the Agent in accordance with the penultimate paragraph of Section 6.02 of the Credit Agreement) are a Consolidated balance sheet of the Lead Borrower and its Subsidiaries as at the end of the Fiscal Quarter ended , and the related Consolidated statements of income or operations, Shareholders’ Equity, cash flows, and borrowing base availability for such Fiscal Quarter and for the portion of the Lead Borrower’s Fiscal Year then ended, setting forth in each case in comparative form the figures for the corresponding Fiscal Quarter of the previous Fiscal Year and (B) the corresponding portion of the previous Fiscal Year, all in reasonable detail, which Consolidated statements fairly present the financial condition, results of operations, Shareholders’ Equity and cash flows of the Lead Borrower and its Subsidiaries as of the end of such Fiscal Quarter in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes. |
1 To be included only if any Unrestricted Subsidiaries. |
4. | [No Material Accounting Changes. There has been a material change in GAAP or the application thereof as disclosed on Appendix [IV] hereto that would affect the computation of any financial ratio or requirement set forth in any Loan Document, and the Lead Borrower hereby requests, the Agent, the Lenders and the Lead Borrower negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders), as further described in Section 1.03(b).] |
5. | [Intellectual Property. Set forth on Appendix [V] hereto is a supplement required pursuant to Section 7.4 of the Guaranty and Security Agreement listing Intellectual Property that has been federally registered during the preceding fiscal quarter, if any, in each case executed by the applicable Loan Parties.]3 |
6. | [Commercial Tort Claims. Set forth on Appendix [VI] hereto is a copy of the written notice to the Agent required pursuant to Section 4.4(d) of the Guaranty and Security Agreement, if the Loan Parties have acquired any Commercial Tort Claim not previously identified to the Agent having a nominal value in excess of $500,000 individually. This Appendix VI serves as supplement to Section IV of the applicable Perfection Certificate and satisfies the requirements of Section 4.4(d) of the Guaranty and Security Agreement in full.]4 |
2To be included only if any Unrestricted Subsidiaries. | ||||
3To be included only if applicable. | ||||
[Remainder of page intentionally left blank.] | ||||
4To be included only if applicable. | ||||
IN WITNESS WHEREOF, I have executed this certificate as of the date first written above. | |||||
By: | |||||
Name: | |||||
Title: | [Responsible Officer of the Lead Borrower] | ||||
[Signature Page to Compliance Certificate] | |||||
APPENDIX I | ||||
APPENDIX II | ||||||
Calculation of Consolidated Fixed Charge Coverage Ratio | ||||||
A. | Calculation of Consolidated Fixed Charge Coverage Ratio for trailing twelve month period ending | |||||
1. | Consolidated EBITDA for such period from Line C.5: | |||||
2. | Minus the following: | |||||
(a) Capital Expenditures made during such period (other than Financed Capital Expenditures): | ||||||
(b) the aggregate amount of Federal, state, local and foreign income taxes paid in cash during such period net of refunds of such Taxes received during such period (but in no event shall the amounts calculated under this clause (2)(b) be less than zero): | ||||||
3. | Line 1, minus the sum of Lines 2(a) and 2(b): | |||||
4. | The sum of the following: | |||||
(a) Consolidated Interest Charges paid or required to be paid in cash during such period: | ||||||
plus | ||||||
(b) scheduled principal payments made or required to be made on account of Indebtedness (excluding the Obligations and any Synthetic Lease Obligations but including, without limitation, principal payments made in respect of Capital Lease Obligations) during such period: | ||||||
(c) The sum of Lines 4(a) and 4(b): | ||||||
5. | CONSOLIDATED FIXED CHARGE COVERAGE RATIO AS OF THE LAST TWELVE MONTH PERIOD ENDED (Line 3 divided by Line 4(c)): | |||||
B. | Consolidated Fixed Charge Coverage Ratio Covenant: During the continuance of a Covenant Compliance Event, the Lead Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly, permit the Consolidated Fixed Charge Coverage Ratio, calculated on a trailing twelve month basis, to be less than 1.0:1.0, commencing with the month ending immediately preceding the date on which a Covenant Compliance Event first occurred. | |||||
1. | Is a Convenant Compliance Event1 Continuing? | Yes | No | |
2. | If yes (covenant required to be tested), in compliance? | |||
C. | Calculation of Consolidated EBIDTA | ||||||
Calculation of Consolidated EBIDTA | For the period Ending: | ||||||
1. | Consolidated Net Income: | ||||||
2. | The sum of the following (to the extent deducted in calculating such Consolidated Net Income): | ||||||
(a) | Provision for Federal, state, local and foreign income Taxes: | ||||||
(b) | Consolidated Interest Charges: | ||||||
(c) | Depreciation and amortization expense: | ||||||
(d) | other expenses reducing such Consolidated Net Income which do not represent a cash item in such period or any future period (in each case of or by the Lead Borrower and its Restricted Subsidiaries for such Measurement Period): | ||||||
(e) | any items of loss resulting from the sale of assets other than in the ordinary course of business (it being understood that gains and losses on sales of Inventory pursuant to “going out of business” or similar sales with | ||||||
1 “Covenant Compliance Event” means, at any time, Availability is less than the greater of (i) ten percent (10%) of the Loan Cap and (ii) $15,000,000. The termination of a Covenant Compliance Event shall in no way limit, waive or delay the occurrence of a subsequent Covenant Compliance Event in the event that the conditions set forth in this definition again arise. | |||||||
respect to 10.0% of the Lead Borrower’s and its Restricted Subsidiaries’ Stores (measured at the commencement of the relevant period) shall not be excluded pursuant to this clause): | |||||||
(f) | one-time costs incurred in connection with acquisitions, divestitures or debt or equity financings after the Closing Date or in connection with the Transactions contemplated hereby: | ||||||
(g) | any restructuring charge or reserve, integration cost or other business optimization expense or cost that is deducted (and not added back) in such period in computing Consolidated Net Income, including any one-time costs related to the closure and/or consolidation of facilities and to exiting lines of business; provided, all such amounts pursuant to this clause, when aggregated with the amount of increases pursuant to clause (b) of the definition of Pro Forma Adjustment for such Measurement Period, shall not exceed 10.0% of Consolidated EBITDA prior to giving effect to any add-back pursuant to this clause: | ||||||
3. | Line 1 plus the sum of lines 2(a) - 2(g): | ||||||
4. | The sum of the following: | ||||||
(a) | Federal, state, local and foreign income tax credits: | ||||||
(b) | any items of gain resulting from the sale of assets other than in the ordinary course of business (it being understood that gains and losses on sales of Inventory pursuant to “going out of business” or similar sales with respect to 10% of the Lead Borrower’s and its Restricted Subsidiaries’ Stores (measured at the commencement of the relevant period) shall not be excluded pursuant to this clause): | ||||||
(c) | all non-cash items increasing Consolidated Net Income (in each case of or by the Lead Borrower and its Restricted Subsidiaries for such Measurement Period), all as determined on a Consolidated basis in accordance with GAAP: | ||||||
5. | Consolidated EBIDTA is line 3 minus the sum of lines 4(a) - 4(c): | ||||||
APPENDIX III | ||||
[Attach financial statements] | ||||
APPENDIX IV | ||||
[To be included if there is a request pursuant to Section 1.03(b). If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Lead Borrower or the Required Lenders shall so request, the Agent, the Lenders and the Lead Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders), as further described in Section 1.03(b).]1 | ||||
1For the avoidance of doubt, notwithstanding any changes in GAAP after the Closing Date that would require lease obligations that would be treated as operating leases as of the Closing Date to be classified and accounted for as Capital Lease Obligations or otherwise reflected on the Lead Borrower’s consolidated balance sheet, such obligations shall continue to be excluded from the definition of Indebtedness. |
APPENDIX V | ||||
Intellectual Property | ||||
APPENDIX VI | ||||
Commercial Tort Claims | ||||
NOTICE AND GRANT OF SECURITY INTEREST IN COMMERCIAL TORT CLAIM | ||||
[______ __], 20[__] | ||||
[Signature page follows] | ||||
GRANTORS: | ||||
[LANDS’ END, INC.] | ||||
By: | ||||
Name: | ||||
Title: | ||||
[OTHER GRANTORS] | ||||
By: | ||||
Name: | ||||
Title: | ACKNOWLEDGED AND AGREED: | |||
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent | ||||
By: | ||||
Name: | ||||
Title: | ||||
EXHIBIT D | ||||
FORM OF ASSIGNMENT AND ASSUMPTION | ||||
1For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language. | ||||
2For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language. | ||||
3Select as appropriate. | ||||
4Include bracketed language if there are either multiple Assignors or multiple Assignees. |
1. | Assignor[s]: |
2. | Assignee[s]: |
3. | Borrowers: Lands’ End, Inc., a Delaware corporation (the “Lead Borrower”) and the other borrowers from time to time to the Credit Agreement (together with the Lead Borrower, each, individually, a “Borrower” and, collectively, the “Borrowers”). |
4. | Agent: Wells Fargo Bank, National Association, as the Agent under the Credit Agreement. |
5. | Credit Agreement: ABL Credit Agreement dated as of [November __], 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) by, among others, (i) the Borrowers, (ii) the guarantors from time to time party thereto (individually, each a “Guarantor” and, collectively, the “Guarantors”), (iii) Wells Fargo Bank, National Association, as Agent for its own benefit and the benefit of the other Credit Parties referred to therein, (iv) Wells Fargo Bank, National Association, as an L/C Issuer and the Swing Line Lender, and (v) the lenders from time to time party thereto. |
6. | Assigned Interest[s]: |
Assignor[s]5 | Assignee[s]6 | Initial Amount of Assignor’s Commitment /Loans7 | Amount of Assignor’s Commitment /Loans Assigned8 | Percentage of Assignor’s Commitment /Loans Assigned9 | Resulting Commitment/Loans Amount for Assignor | Resulting Commitment/Loans Amount for Assignee |
$___________ | $___________ | _________% | $___________ | $___________ | ||
$___________ | $___________ | _________% | $___________ | $___________ |
7. | [Trade Date: ]10 |
5List each Assignor, as appropriate. | ||||||
6List each Assignee, as appropriate. | ||||||
7Amounts in this column and in the column immediately to the right to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date. | ||||||
8Subject to minimum amount requirements pursuant to Section 10.06(b) of the Credit Agreement and subject to proportionate amount requirements pursuant to Section 10.06(b) of the Credit Agreement. | ||||||
9Set forth, to at least 9 decimals, as a percentage of the Commitments/Loans of all Lenders thereunder. | ||||||
10To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date. | ||||||
The terms set forth in this Assignment and Assumption are hereby agreed to: | ||||||
ASSIGNOR | ||||||
[NAME OF ASSIGNOR] | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
ASSIGNEE | ||||||
[NAME OF ASSIGNEE] | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
[Consented to and]1 Accepted: | ||||||
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
[Consented to: | ||||||
LANDS’ END, INC., as the Lead Borrower | ||||||
By: | ||||||
Name: | ||||||
Title: | ]2 | |||||
1To the extent that the Agent’s consent is required under Section 10.06 of the Credit Agreement. | ||||||
2To the extent that the Borrower’s consent is required under Section 10.06 of the Credit Agreement. | ||||||
STANDARD TERMS AND CONDITIONS FOR | ||||
ASSIGNMENT AND ASSUMPTION |
EXHIBIT E | |||||||
FORM OF BORROWING BASE CERTIFICATE | |||||||
Lands' End, Inc. | |||||||
Borrowing Base Certificate | |||||||
Certificate No. | |||||||
Certificate Date | |||||||
Collateral Date | |||||||
Domestic | In USD | ||||||
Inventory as of: | At Cost | ||||||
Add: | Mail order stock ledger | $ - | |||||
Inlet stock ledger | $ - | ||||||
Liquidation inventory | $ - | ||||||
Shops at Sears | $ - | ||||||
In-transit inventory | $ - | ||||||
Shops at Sears In-transit inventory | $ - | ||||||
Total On Hand Inventory | $ - | ||||||
Shrink -Inlet locations | $ - | ||||||
Shrink -Mail order (last 6 months of cycle count results) | $ - | ||||||
Shrink -Lands' End Shops (per gl account) | $ - | ||||||
Retail dummy locations | $ - | ||||||
Damaged/Unsaleable Inventory | $ - | ||||||
Ineligible Inventory at closed locations (excluding pop-up, temp locations) | $ - | ||||||
Inventory at closed pop-ups and temp locations >$50M | $ - | ||||||
Embroidery Inventory in excess of $2.5MM | $ - | ||||||
In-transit inventory >50 days from ship date | $ - | ||||||
In-transit error-test reserve (7.7% of in-transit inventory) | $ - | ||||||
In-transit error rate for Shops at Sears (5.0%) | $ - | ||||||
In-transit UPS reserve | $ - | ||||||
Other Ineligible Inventory | $ - | ||||||
Total Inventory Ineligibles | $ - | ||||||
Eligible Inventory | $ - | ||||||
NOLV | |||||||
LTV (Jan1 - Sept 30: 90%; Oct 1 -Dec 31: 92.5% | |||||||
Advance Rate | |||||||
Total Domestic Inventory Availability | $ - | ||||||
Trade Receivables as of: | 1-0-1900 | $ - | |||||
LESS: | Accounts more than 60 days past due date | $ - | |||||
Accounts more than 90 days from invoice date (120 days on investment grade) | $ - | ||||||
Aged credit balance | $ - | ||||||
Cross age (past due > 50%) | $ - | ||||||
Affiliates/Intercompany | $ - | ||||||
Foreign accounts | $ - | ||||||
Government accounts | $ - | ||||||
Concentration | $ - | ||||||
Receivables for sale of gift cards | $ - | ||||||
Other Ineligible Trade Receivables | $ - | ||||||
Total Ineligible Trade Receivables | $ - | ||||||
Eligible Trade Receivables | $ - | ||||||
Advance Rate | |||||||
Total Trade Receivables Availability (Capped at 20% of the Borrowing Base) | $ - | ||||||
Credit Card Receivables as of: | 1-0-1900 | $ - | |||||
LESS: | Outstanding Fees (2.3%) | $ - | |||||
Amounts Older Than Five Business Days | $ - | ||||||
Other Ineligible Credit Card Receivables | $ - | ||||||
Total Ineligible Credit Card Receivables | $ - | ||||||
Eligible Credit Card Receivables | $ - | ||||||
Advance Rate: | 90.0 | % | |||||
Credit Card Receivables Availability | $ - |
LESS: Availability Reserves in respect of Domestic Loan Parties: | |||||||||
Dilution reserve (3.22% of Eligible Trade Receivables) | $ - | ||||||||
Landing costs on import in-transit Mail Order (15.43%) | $ - | ||||||||
Landing costs on import in-transit LES (17.0%) (calculation) | $ - | ||||||||
Gift certificates and merchandise credits (Face Value x 50%) | $ - | ||||||||
Gift certificates -LEO (Face Value x product margin x 50%) | $ - | ||||||||
Customer deposits (100%) | $ - | ||||||||
Shopes at Sears (one week sales (last week's sales) | $ - | ||||||||
Total Availability Reserves | $ - | ||||||||
Total Uncapped Borrowing Base | $ - | ||||||||
Total Borrowing Base (Capped at $175,000,000) | $ - | ||||||||
Suppressed Availability | $ - | ||||||||
Availability Calculation | |||||||||
Beginning Principal Balance | as of: | 1/0/1900 | $ - | ||||||
ADD: | LCs Debited | $ - | |||||||
ADD: | Interest Charged | $ - | |||||||
ADD: | Fees Charged | $ - | |||||||
ADD: | Prior Day's Requested Lending | $ - | |||||||
LESS: | Prior Day's Paydown | $ - | |||||||
Ending principal balance prior to advance request | $ - | ||||||||
ADVANCE REQUEST | $ - | ||||||||
Ending Principal Balance | $ - | ||||||||
ADD: | LIBOR Loans | $ - | |||||||
ADD: | Standby Letters of Credit | $ - | |||||||
ADD: | Documentary Letters of Credit | $ - | |||||||
Total exposure | $ - | ||||||||
Total Net Availability | $ - | ||||||||
Availability as Percentage of Loan Cap | #DIV/0! | ||||||||
Monthly Financial Reporting (If availability is less than the greater of (i) $131,250,000 and (i) 80% of the Loan Cap) | $ | 131,250,000 | 80.0 | % | Trigger | ||||
Appraisal/Exam Cadence (to 2x/yr if availability is less than the greater of (i) $35,000,000 and (ii) 22.5% of the Loan Cap) | $ | 35,000,000 | 22.5 | % | Trigger | ||||
Accelerated Borrowing Base Reporting (weekly if availability is less than the greater of (i) 22,500,000 and (ii) 15% of the Loan Cap) | $ | 22,500,000 | 15.0 | % | Trigger | ||||
Springing FCCR Test (If availability is less than the greater of (i) $15,000,000 and (ii) 10% Loan Cap; FCCR of 1.0:1.0 required) | $ | 15,000,000 | 10.0 | % | Trigger | ||||
The undersigned, a Responsible Officer (as defined in the Credit Agreement referred to below) of Lands' End, Inc. (the "Lead Borrower"), represents and warrants that (A) the information set forth above and the supporting documentation and information delivered herewith (i) is complete and correct in all respects, (ii) has been prepared in accordance with the requirements of that certain Credit Agreement dated November 16, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"), by, among others, (1) the Lead Borrower, (2) the other Borrowers party thereto, (3) the Guarantors party thereto, (4) the Lenders party thereto, and (5) Wells Fargo Bank, National Association, as agent for the Lenders (in such capacity, the "Agent"), and (iii) is based on supporting documentation pursuant to the Credit Agreement, (B) no Default or Event of Default (as such terms are defined in the Credit Agreement) has occurred and is continuing, and (C) the representations and warranties of each Loan Party contained in Article V of the Credit Agreement, or in any other Loan Document, are true and correct in all material respects on and as of the date of the date hereof, except (i) to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date, (ii) in the case of any representation and warranty qualified by materiality, in which case they shall be true and correct in all respects and (iii) the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished to clauses (a) and (b), respectively, of Section 6.01 of the Credit Agreement. | |||||||||
Responsible Officer | |||||||||
[Insert name/title] | Date | ||||||||
EXHIBIT F-1 | ||||
FORM OF U.S. TAX COMPLIANCE CERTIFICATE | ||||
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes) | ||||
[NAME OF LENDER] | ||||
By: | ||||
Name: | ||||
Title: | ||||
Date: | , 20[ ] | |||
EXHIBIT F-2 | ||||
FORM OF U.S. TAX COMPLIANCE CERTIFICATE | ||||
(For Foreign Participants That Are Not Partnerships For U.S. | ||||
Federal Income Tax Purposes) | ||||
[NAME OF PARTICIPANT] | ||||
By: | ||||
Name: | ||||
Title: | ||||
Date: | , 20[ ] | |||
EXHIBIT F-3 | ||||
FORM OF U.S. TAX COMPLIANCE CERTIFICATE | ||||
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes) | ||||
[NAME OF PARTICIPANT] | ||||
By: | ||||
Name: | ||||
Title: | ||||
Date: | , 20[ ] | |||
EXHIBIT F-4 | ||||
FORM OF U.S. TAX COMPLIANCE CERTIFICATE | ||||
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes) | ||||
[NAME OF LENDER] | ||||
By: | ||||
Name: |
Title: | ||||
Date: | , 20[ ] | |||
EXHIBIT G | ||||
FORM OF CREDIT CARD NOTIFICATION | ||||
PREPARE ON LOAN PARTY LETTERHEAD - ONE FOR EACH PROCESSOR | ||||
To: [Name and Address of Credit Card Processor] (The “Processor”) | ||||
Re: | [ ] (the “Company”) | |||
Merchant Account Number: |
1. | The undersigned hereby instructs the Processor that, until the Processor receives written notification (i) executed by the Company and the Agent to the contrary, or (ii) executed by Agent to the contrary, all amounts as may become due from time to time from the Processor to the Company shall [continue to] be transferred only by ACH, Depository Transfer Check, or Electronic Depository Transfer to: |
[____________________] | ||||
ABA# | ||||
Account No. | ||||
Re: Lands’ End, Inc. |
2. | Upon request of the Agent, a copy of each periodic statement provided by the Processor to the Company should be provided to the Agent at the following address (which address may be changed upon seven (7) days’ written notice given to the Processor by the Agent): |
Wells Fargo Bank, National Association | ||||
One Boston Place, 18th Floor | ||||
Boston, Massachusetts 02108 | ||||
Attention: [Y. Sonia Anandraj] | ||||
Re: Lands’ End, Inc. |
3. | The Processor shall be fully protected in acting on any written order or direction executed (i) by the Company and the Agent, or (ii) by the Agent, in each case respecting the Charges and the Credit Card Proceeds without making any inquiry whatsoever as to the Company’s right or authority (so long as such order or direction is also executed by the Agent) or Agent’s right or authority to give such order or direction or as to the application of any payment made pursuant thereto. |
[remainder of page intentionally left blank] |
Very truly yours, | ||||||
[ ], as the Company | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
cc: Wells Fargo Bank, National Association | ||||||
[Signature Page to Credit Card Notification] |
EXHIBIT H | ||||
FORM OF INTERCOMPANY NOTE | ||||
[Signature Page Follows] | ||||
This Intercompany Note is dated as of ____________ ___, _____. | ||||
[SIGNATURE BLOCKS FOR THE LEAD BORROWER AND ITS SUBSIDIARIES AND NON- | ||||
LOAN PARTY PAYEES TO BE INSERTED] | ||||
Signature Page to Intercompany Note |
Exhibit 10.4 | ||||
***** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. | ||||
SECOND AMENDMENT TO MASTER LEASE AGREEMENT |
W I T N E S S E T H |
LANDLORD: | |||
SEARS, ROEBUCK AND CO., a New York corporation | |||
By: | /s/ Robert A. Riecker | ||
Name: | Robert A. Riecker | ||
Title: | Chief Financial Officer | ||
Date: | January 31, 2018 | ||
TENANT: | |||
LANDS' END, INC., a Delaware corporation | |||
By: | /s/ James F. Gooch | ||
Name: | James F. Gooch | ||
Title: | Chief Operating Officer/ Chief Financial Officer | ||
Date: | January 31, 2018 | ||
Annex A to Master Lease Agreement dated April 4, 2014 effective as of February 1, 2018 |
% Rent Location [*****] Gross Sales | ||||||||||||||||||||||
Store Num | Store Name | Leased/Owned | Sq. Ft. | Rent PSF | Full Year | Monthly | Expiration Date | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Jan | Full Year | FY2019 | |
1004 | 1004 GARDEN CITY | Ground Lease | 15,343 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1011 | 1011 GRANDVILLE | Owned | 4,621 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1012 | 1012 DES MOINES | Owned | 4,841 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1013 | 1013 GLEN BURNIE | Ground Lease | 8,050 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1022 | 1022 OMAHA | Owned | 4,760 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1023 | 1023 DULLES/LOUDOUN CNTY | Owned | 9,535 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1029 | 1029 SPOKANE | Owned | 6,049 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1033 | 1033 N ATTLEBORO | Owned | 10,327 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1043 | 1043 MERIDEN | Owned | 6,910 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1044 | 1044 JERSEY CTY/NEWPORT | Ground Lease | 5,411 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1048 | 1048 PASADENA | Ground Lease | 7,168 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1051 | 1051 STRONGSVILLE | Owned | 5,833 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1073 | 1073 EXTON | Ground Lease | 9,039 | [*****] | [*****] | [*****] | 10/5/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1074 | 1074 WALDORF/ST CHARLES | Owned | 8,771 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1104 | 1104 MARLBOROUGH | Owned | 9,950 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1110 | 1110 PORTAGE | Owned | 5,178 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1120 | 1120 COLUMBUS | Owned | 8,374 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1136 | 1136 BIRMINGHAM/RIVERCHASE | Owned | 4,215 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1139 | 1139 TUKWILA | Ground Lease | 7,216 | [*****] | [*****] | [*****] | 7/31/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1155 | 1155 KENNESAW | Owned | 8,086 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1171 | 1171 SPRINGFIELD | Owned | 4,748 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1182 | 1182 ST PETERS | Owned | 8,004 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
1192 | 1192 MUSKEGON | Owned | 4,261 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1210 | 1210 COLUMBUS/POLARIS | Owned | 6,611 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1221 | 1221 COLORADO SPRINGS | Owned | 5,076 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1224 | 1224 HARRISBURG | Owned | 7,435 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1253 | 1253 PEABODY | Ground Lease | 13,313 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1263 | 1263 WATERBURY | Owned | 7,176 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1271 | 1271 LITTLETON/DENVER SW | Owned | 5,885 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1274 | 1274 RICHMOND/CHESTERFIELD | Ground Lease | 7,551 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1278 | 1278 TORRANCE | Ground Lease | 7,489 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1280 | 1280 SPRINGDALE | Ground Lease | 16,506 | [*****] | [*****] | [*****] | 7/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1283 | 1283 BRAINTREE | Ground Lease | 8,694 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1290 | 1290 NILES | Owned | 7,305 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1304 | 1304 SILVER SPRING | Ground Lease | 4,973 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1314 | 1314 NEW BRUNSWICK | Owned | 7,107 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1333 | 1333 POUGHKEEPSIE | Ground Lease | 5,523 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1335 | 1335 GREENSBORO | Ground Lease | 5,856 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1337 | 1337 PLANO | Owned | 4,196 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1353 | 1353 DE WITT/SYRACUSE | Owned | 8,801 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1354 | 1354 WILLOW GROVE | Owned | 8,635 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1364 | 1364 LAKE GROVE | Owned | 7,133 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1368 | 1368 CONCORD | Ground Lease | 9,947 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1374 | 1374 BEL AIR | Ground Lease | 6,517 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1375 | 1375 WINSTON SALEM | Owned | 10,406 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1404 | 1404 MASSAPEQUA | Ground Lease | 6,997 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1443 | 1443 MANCHESTER | Owned | 6,482 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1447 | 1447 FT WORTH | Owned | 4,387 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
1460 | 1460 LIVONIA | Owned | 5,116 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1463 | 1463 BURLINGTON | Ground Lease | 7,315 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1475 | 1475 DURHAM | Owned | 7,596 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1494 | 1494 MOORESTOWN | Ground Lease | 8,126 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1504 | 1504 WILLIAMSVILLE/BUFFALO | Owned | 6,946 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1570 | 1570 SCHAUMBURG | Owned | 6,552 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1595 | 1595 GREENVILLE | Owned | 5,742 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1600 | 1600 INDIANAPOLIS CASTLETON SQ | Owned | 15,291 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1605 | 1605 RALEIGH | Owned | 7,204 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1610 | 1610 CINCINNATI NORTHGATE | Owned | 5,933 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1614 | 1614 LIVINGSTON | Owned | 8,270 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1620 | 1620 VERNON HILLS | Owned | 7,853 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1644 | 1644 LANCASTER | Ground Lease | 8,635 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1654 | 1654 MEDIA | Ground Lease | 8,919 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1685 | 1685 DULUTH | Owned | 6,545 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1690 | 1690 CHESTERFIELD | Owned | 8,489 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1710 | 1710 NO OLMSTED | Owned | 8,789 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1720 | 1720 STERLING HTS | Owned | 8,167 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1722 | 1722 BLOOMINGTON | Ground Lease | 8,564 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1730 | 1730 FLORENCE | Owned | 6,338 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1734 | 1734 LAWRENCEVILLE | Owned | 10,295 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1744 | 1744 OCEAN | Owned | 8,224 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1754 | 1754 GAITHERSBURG | Owned | 8,839 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1760 | 1760 NOVI | Owned | 8,769 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1765 | 1765 PALM BEACH GARDENS | Ground Lease | 6,188 | [*****] | [*****] | [*****] | 10/31/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1800 | 1800 MISHAWAKA | Owned | 5,927 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
1804 | 1804 BARBOURSVILLE | Owned | 8,441 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1805 | 1805 RALEIGH | Owned | 7,318 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1834 | 1834 NORTH WALES | Ground Lease | 9,819 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1853 | 1853 WILMINGTON | Owned | 8,415 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1854 | 1854 PARKVILLE | Owned | 7,928 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1958 | 1958 SAN JOSE/OAK RIDGE | Ground Lease | 7,547 | [*****] | [*****] | [*****] | 3/23/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2027 | 2027 WASILLA | Ground Lease | 7,063 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2092 | 2092 APPLETON | Owned | 5,792 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2183 | 2183 SO PORTLAND | Owned | 5,564 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2309 | 2309 SILVERDALE | Owned | 4,226 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2395 | 2395 MANASSAS | Ground Lease | 7,407 | [*****] | [*****] | [*****] | 6/14/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
Total | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | ||||||||
Count | 85 | 85 | 84 | 84 | 84 | 84 | 83 | 83 | 83 | 82 | 82 | 82 | ||||||||||
Adjustment 1 | ||||||||||||||||||||||
Adjustment 2 | ||||||||||||||||||||||
Adjustment 3 | ||||||||||||||||||||||
Revised Totals | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
ANNEX C | ||||
PERCENTAGE RENT | ||||
Exhibit 10.5 | ||||
***** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. | ||||
MASTER SUBLEASE AGREEMENT |
RECITALS: |
1. | Subleased Premises |
2. | Term. |
(a) | Unless earlier terminated as to all or any of the Subleased Premises pursuant to the express terms and conditions of this Sublease and subject to all of the terms and conditions of the Master Lease, including, without limitation, the extension, expiration, rejection or earlier termination provisions thereof, and subject to the terms and conditions hereof, the term (“Term”) of this Sublease with respect to each Subleased Premises shall commence on the Commencement Date and shall expire on the earlier to occur of (i) the expiration, rejection or earlier termination of the Master Lease or (ii) the date set forth set forth on Annex A under the column heading “Expiration Date” (each, an “Expiration Date”). In the event that the Master Lease shall terminate early, the Sublandlord shall provide notice to the Subtenant. |
(b) | Subtenant shall have no right to extend the Term of the this Sublease with respect to any of the Subleased Premises, except that by the date which is referenced on Annex A under the column heading “Expiration Date” for each Subleased Premises, Subtenant may send written notice to Sublandlord of its desire to negotiate extending the Term with respect to such Subleased Premises, and Sublandlord may (but shall not be obligated to), in its sole discretion, agree to negotiate such an extension on terms and conditions mutually agreeable to Sublandlord and Subtenant. |
3. | Rent. |
(a) | Rent shall begin to accrue and shall be due to Sublandlord on the Commencement Date. Subtenant agrees to pay rent for the Subleased Premises in the annual amount set forth on Annex A under the column heading “Rent PSF” for the applicable fiscal year (the “Rent”); provided, however, that the terms and provisions of Annex C (“Percentage Rent”) shall apply with respect to the locations listed thereon. Subtenant shall pay one-twelfth (1/12) of the annual Rent (or a prorated amount during partial months), in advance, on the first day of each month, without notice, offset or deductions except as otherwise set forth herein. Rent is inclusive of third-party common area maintenance costs, real estate taxes and utilities but does not cover any other costs or services. |
(b) | All Rent (as defined below) shall be made payable to Sublandlord and mailed to Sublandlord’s address as outlined in the “Notice” Section of this Sublease until the payee or address is changed by written notice from Sublandlord. |
4. | Hold Over. |
5. | Subtenant’s Taxes. |
6. | Late Charges/Interest. |
7. | Use; Operations; and Radius Restriction. |
(a) | Subtenant shall use the Subleased Premises only as a Lands’ End retail shop consistent with the current format Subtenant is currently operating in each Subleased Premises and for no other purpose (“Permitted Use”). Subtenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to emanate from any Subleased Premises, nor take any other action which would constitute a nuisance or which would disturb or endanger any other occupants (including Sublandlord’s retail operations) of the Building, or unreasonably interfere with such other occupants’ use of their respective space. |
(b) | Subtenant agrees to continuously operate its business in the entirety of each Subleased Premises under the name “Lands’ End” throughout the Term of this Sublease and for the same operating hours of Sublandlord’s store in which the Subleased Premises are located. If Subtenant violates this Section, then in addition to all rights and remedies available to Sublandlord pursuant to Section 15, Subtenant shall also pay to Sublandlord, upon demand, for each non-compliant Subleased Premises, liquidated damages in an amount equal to Five Hundred and No/100 Dollars ($500.00) for each day such violation continues; provided, however, that this provision shall not apply if the Subleased Premises should be closed and the business of Subtenant temporarily discontinued therein on account of remodeling or renovation which is completed within ten (10) business days. Subtenant acknowledges and agrees that if it breaches this Section, Sublandlord shall be deprived of an important right under this Sublease, and as a result thereof, will suffer damages in an amount which is not readily ascertainable, and that the foregoing is a reasonable and equitable determination of the actual damages Sublandlord shall suffer as a result of Subtenant’s breach of its obligations under this Section. |
(c) | Subtenant covenants and agrees that during the Term, Subtenant (and if Subtenant is a corporation, membership entity or partnership, its officers, directors, stockholders, members, managers, affiliates or partners) shall not directly or indirectly, operate or manage any other store or business similar to or in competition with the use for which the Subleased Premises are let (including, without limitation, any concession or department operated within another store or business), within the same shopping center or retail center development of which the Building is a part. |
8. | Hazardous Materials. |
9. | Repairs, Maintenance, Utilities and Other Services. |
(a) | Subtenant shall accept each Subleased Premises in its “AS-IS”, “WHERE IS” and “WITH ALL FAULTS” condition. Sublandlord makes no representations or warranties as to the conditions of any Subleased Premises, and Subtenant acknowledges that it is fully aware of the existing conditions of each Subleased Premises since it has occupied and operated in such Subleased Premises prior to the date of this Sublease. Sublandlord shall have no responsibility or obligation to make repairs or replacements to or upon a Subleased Premises or to perform any maintenance which becomes necessary during Subtenant’s occupancy of such Subleased Premises. Subtenant shall comply with all laws, statutes, governmental regulations and local ordinances (including, without limitation, the Americans with Disabilities Act) and the direction of the proper public officials concerning its use of each Subleased Premises. Subtenant shall return each Subleased Premises to Sublandlord “broom clean” and in the same condition as it exists as of the beginning of the Term, excluding ordinary wear and tear. |
(b) | Sublandlord shall not be liable to Subtenant for damages or otherwise if the utilities serving the Subleased Premises or Building of which the Subleased Premises are a part are interrupted or terminated for any cause; provided, however, the foregoing shall not limit Subtenant’s remedies expressly set forth in Section 19. |
(c) | Sublandlord and Subtenant agree that Sublandlord is not providing any services to Subtenant at any Subleased Premises which are not expressly set forth herein; by way of example and without limitation of the foregoing disclaimer, Sublandlord is expressly not providing the following services to Subtenant: cleaning or maintenance of the Subleased Premises, loss prevention, general liability or property insurance, stock room replenishment, use of Sublandlord’s Point of Sale system, shipping/receiving, wi-fi or accepting returns of Subtenant’s merchandise. Sears, Roebuck and Co. and Subtenant have entered into that certain Retail Operations Agreement dated as of April 4, 2014 (the “RSA”) providing for additional services and/or for rules and restrictions governing Subtenant’s use of the Subleased Premises and other portions of Sublandlord’s Buildings. |
10. | Fixtures/Alterations. |
11. | Access to Subleased Premises. |
12. | Assignment / Sublease. |
13. | Surrender. |
14. | Right to Relocate. |
15. | Default. |
(a) | If Subtenant (i) defaults in any of its monetary obligations under this Sublease or (ii) materially defaults in any of its non-monetary obligations under this Sublease, and Subtenant fails to cure such default within ten (10) business days after receipt of written notice thereof, then, in addition to all other rights which Sublandlord has at law or in equity, Sublandlord shall have the following rights and remedies: (x) to terminate this Sublease with respect to the applicable Subleased Premises in which event Subtenant shall immediately surrender such Subleased Premises to Sublandlord and, if Subtenant fails to do so, Sublandlord may, without prejudice to any other remedy which Sublandlord may have for possession or arrearages in Rent, enter upon and take possession of the applicable Subleased Premises and expel or remove Subtenant and any other person who may be occupying such Subleased Premises or any part thereof, by any legal means, without being liable for prosecution for any claim of damages therefore; (y) to enter upon and take possession of the applicable Subleased Premises and expel or remove Subtenant and any other person who may be occupying such Subleased Premises or any part thereof, by any legal means, without being liable for prosecution of any claim for damages therefore with or without having terminated this Sublease; (z) do whatever Subtenant is obligated to do under the terms of this Sublease (and enter upon the applicable Subleased Premises in connection therewith if necessary) without being liable for prosecution or any claim for damages therefore, and Subtenant agrees to reimburse Sublandlord on demand for any expenses which Sublandlord may incur in thus effecting compliance with Subtenant’s obligations under this Sublease with respect to a Subleased Premises, plus interest thereon at the Default Rate, and Subtenant further agrees that Sublandlord shall not be liable for any damages resulting to Subtenant from such action. |
(b) | In the event Sublandlord elects to terminate this Sublease with respect to a Subleased Premises in accordance with the foregoing, then notwithstanding such termination, Subtenant shall be liable for and shall pay to Sublandlord the sum of all Rent and other amounts payable to Sublandlord pursuant to the terms of this Sublease with respect to such Subleased Premises which have accrued to the date of such termination, plus, as damages, an amount equal to the net present value of the difference between (i) total Rent reserved by this Sublease for the remaining portion of the Term (had such Term not been terminated by Sublandlord prior to the Expiration Date) less (ii) the net amount Subtenant proves Sublandlord would have received during such remaining portion of the Term through reletting of the applicable Subleased Premises. For the purposes hereof, “net present value” shall be determined using a discount rate equal to four percent (4%) per annum. |
(c) | In the event Sublandlord elects to repossess the applicable Subleased Premises without terminating this Sublease with respect to such Subleased Premises, then Subtenant shall be liable for and shall pay to Sublandlord all rental and other amounts payable to Sublandlord (including, without limitation, the damages amount set forth in Section 7(b)) pursuant to the terms of this Sublease which have accrued to the date of such repossession, plus, from time to time throughout the remaining Term, total Rent required to be paid by Subtenant to Sublandlord during the remainder of the Term diminished by any net sums thereafter received by Sublandlord through reletting of the applicable Subleased Premises during said period. In no event shall Subtenant be entitled to any excess of any rental obtained by reletting over and above the rental herein reserved. Actions to collect amounts due by Subtenant to Sublandlord |
16. | Notices. |
Sublandlord: | |
c/o Sears Holding Corporation 3333 Beverly Road | |
Department 824RE | |
Hoffman Estates, Illinois 60179 | |
Attn: President - Real Estate | |
With a copy to: | |
Sears Holding Corporation 3333 Beverly Road | |
Department 824RE | |
Hoffman Estates, Illinois 60179 | |
Attn: Associate General Counsel - Real Estate |
Subtenant: | Lands’ End, Inc. |
5 Lands’ End Lane | |
Dodgeville, Wisconsin 53595 | |
Attn: Senior Vice President | |
With a copy to: | |
Lands’ End, Inc. | |
5 Lands’ End Lane | |
Dodgeville, Wisconsin 53595 | |
Attn: General Counsel | |
17. | Indemnity. |
18. | Insurance. |
(a) | Subtenant shall maintain, or cause to be maintained on its behalf, during the Term: |
(i) | Commercial General Liability including Premises Operations, Products and Completed Operations Liability, Contractual Liability covering the Subtenant and naming Sears Holdings Management Corporation as additional insured with limits of no less than Two Million Dollars ($2,000,000) combined single limit primary and non-contributory to any liability insurance maintained by Sublandlord. |
(ii) | Workers’ Compensation at statutory limits, as required by the state where the work is being performed, and Employer’s Liability with limits of no less than $500,000 each accident or occupational disease. |
(iii) | Comprehensive Automobile Liability Insurance, which shall include bodily injury and property damage liability, including the ownership, maintenance and operation of any automobile equipment owned, hired and non-owned including the loading and unloading thereof, with limits of at least $2,000,000 for each accident. |
(iv) | “All-risk” property damage insurance (“Subtenant’s Hazard Insurance”) including Builders’ Risk protecting against all risk of physical loss or damage, including without limitation, and sprinkler leakage coverage in amounts not less than the actual replacement cost, covering all of Subtenant’s inventory, trade fixtures, furnishing, wall covering, floor covering, carpeting, drapes, equipment and all items of personal property of Subtenant located within the Subleased Premises and within 100 feet of the Subleased Premises, against all risks of physical loss or damage. |
(b) | In addition to the insurance coverage to be maintained by Subtenant above, Subtenant will require each contractor (if any) performing the services under the direction of Subtenant to obtain insurance coverage in the same form and amounts as detailed above (“Contractor Insurance”). The Contractor Insurance shall name Sears Holdings Corporation its subsidiaries and affiliates as additional insured, and shall stipulate that such insurance is primary to, and not contributing with, any other insurance carried by, or for the benefit of, Sears, Roebuck and Co., Kmart Corporation, or the other additional insured. Subtenant warrants that its contractors will maintain Workers’ Compensation and Employer’s Liability insurance. It is the responsibility of Subtenant to obtain and maintain a certificate of insurance from each contractor and make the certificate available to Sears Operations LLC upon request. |
(c) | Such insurance set forth in subsection (a) above shall be obtained from insurers of recognized financial responsibility who shall be licensed in the state in which each Subleased Premises is located. Subtenant shall provide Sublandlord with certificates evidencing the coverage required hereunder. Sublandlord and others designated by Sublandlord in being additional insureds, shall be named as additional insureds under the insurance policies described in this Section 18. The certificates of insurance, to the extent the same is standard in the industry, shall |
(d) | Waiver of Subrogation Rights. Each party hereto has hereby remised, released, and discharged and does remise, release, and discharge the other party hereto and any officer, agent, employee, or representative of such party of and from any claims, rights of recovery, or liability whatsoever (and each party hereby waives all rights of subrogation) hereafter arising from loss, damage, or injury caused by fire or other casualty of the type which is required to be insured under the policies of insurance required to be maintained by the releasing party as of the date of any casualty, SUCH WAIVER TO BE EFFECTIVE REGARDLESS OF THE CAUSE OR ORIGIN OF SUCH DAMAGE OR LOSS INCLUDING, WITHOUT LIMITATION, THE NEGLIGENCE OF A PARTY HERETO OR ANY OF ITS OFFICERS, AGENTS, EMPLOYEES OR REPRESENTATIVES. Subtenant shall procure an appropriate clause in or endorsement to any policy of insurance covering Subtenant’s personal property, inventory, fixtures, furnishing and equipment located in the Subleased Premises, wherein the insurer waives subrogation or consents to a waiver of its right of recovery. |
19. | Casualty. |
20. | Condemnation. |
21. | No Liens. |
22. | Sublease Subject to Possible Third Party Interests. |
(a) | Notwithstanding Subtenant’s rights under this Sublease, Subtenant hereby acknowledges that Sublandlord makes no representations or warranties with respect to whether or not Subtenant’s use of a Subleased Premises for its Permitted Use is permitted under any documents encumbering or otherwise affecting Sublandlord’s interest in the applicable Subleased Premises (each, a “Third Party Agreement”). Subtenant understands and agrees that Sublandlord has not requested the consent of any third party to this Sublease with respect to any Subleased Premises, which third party may or may not have a right to grant or withhold such consent, and that if Subtenant desires to obtain any such consent, then Subtenant may seek to obtain such consent at its own cost, risk and expense. Subtenant’s rights with respect to this Sublease, are subject and subordinate to all applicable Third Party Agreements. |
(b) | Subtenant acknowledges and agrees that Sublandlord has made available to Subtenant for copying and review (including by means of any website or other electronic means which have been made available to Subtenant prior to the execution of this Sublease) all Third Party Agreements in Sublandlord’s possession or control. As such, Subtenant shall be deemed to know of the existence of any fact or circumstance as disclosed by any Third Party Agreement for the purposes of this Section 22. Notwithstanding the foregoing, in making such Third Party Agreements available to the Subtenant, Subtenant acknowledges that Sublandlord makes no representation or warranty as to the completeness or accuracy of the information provided. |
23. | Limitation on Sublandlord’s Liability. |
24. | Additional Documentation. |
25. | Rules and Regulations. |
26. | Signage. |
27. | Master Lease |
28. | Risk of Loss. |
29. | Sublandlord’s Early Termination Option. |
(i) | If Sublandlord is selling or has sold the Building in which the Subleased Premises are located or if Sublandlord ceases to operate a retail facility in the Building in which the Subleased Premises are located in substantially the same manner as existing on the date of this Sublease, then Sublandlord shall terminate this Sublease with respect to the applicable Subleased Premises by delivery of written notice to Subtenant, with such termination to be effective ninety (90) days after the date of such notice; or |
(ii) | If any third party under a Third Party Agreement objects to this Sublease with respect to a Subleased Premises, then Sublandlord shall, in Sublandlord’s sole discretion, either (a) terminate this Sublease with respect to the applicable Subleased Premises by delivery of written notice to Subtenant, with such termination to be effective thirty (30) days after the date of such notice or (b) procure the third party’s agreement to permit Subtenant to continue to occupy the applicable Subleased Premises as provided for under the terms of this Sublease. |
30. | Quiet Enjoyment. |
31. | Encroachments. |
32. | Choice of Law, Litigation, Court Costs and Attorney’s Fees. |
33. | Counterparts |
34. | Acknowledgement of Representation by Legal Counsel. |
SUBLANDLORD: | |||
SEARS OPERATIONS LLC, A Delaware limited liability company | |||
By: | /s/ Robert A. Riecker | ||
Name: | Robert A. Riecker | ||
Title: | Chief Financial Officer | ||
SUBTENANT: | |||
LANDS’ END, INC., a Delaware corporation | |||
By: | /s/ James F. Gooch | ||
Name: | James F. Gooch | ||
Title: | COO/CFO | ||
Annex A to Master Sublease Agreement dated February 1, 2018, effective as of February 1, 2018 |
% Rent Location [*****] Gross Sales | |||||||||||||||||||||
Store Num | Store Name | Leased/Owned | Sq. Ft. | Rent PSF | Full Year | Monthly | Expiration Date | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Jan | Full Year | FY2019 |
1067 | 1067 HOUSTON/MEMORIAL | Lease | 4,941 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
1069 | 1069 REDMOND OVERLAKE PARK | Lease | 11,458 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
1119 | 1119 PORTLAND | Lease | 6,442 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
1146 | 1146 CORDOVA/MEMPHIS/GERMANTWN | Lease | 4,754 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
1264 | 1264 HICKSVILLE | Lease | 8,369 | [*****] | [*****] | [*****] | 4/13/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
1313 | 1313 NASHUA | Lease | 7,573 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
1814 | 1814 FAIRFAX | Lease | 6,061 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
1944 | 1944 YORKTOWN HEIGHTS | Lease | 6,334 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
2514 | 2514 WARRENTON | Lease | 7,130 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
Total | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |||||||
Count | 9 | 9 | 9 | 8 | 8 | 8 | 8 | 8 | 8 | 8 | 8 | 8 | |||||||||
Adjustment 1 | |||||||||||||||||||||
Adjustment 2 | |||||||||||||||||||||
Adjustment 3 | |||||||||||||||||||||
Revised Totals | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
ANNEX B | ||||
MASTER LEASE | ||||
ANNEX C | ||||
PERCENTAGE RENT | ||||
Exhibit 10.8 | ||||
***** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. | ||||
SECOND AMENDMENT TO MASTER SUBLEASE AGREEMENT |
W I T N E S S E T H |
SUBLANDLORD: | |||
SEARS, ROEBUCK AND CO., a New York corporation | |||
By: | /s/ Robert A. Riecker | ||
Name: | Robert A. Riecker | ||
Title: | Chief Financial Officer | ||
Date: | January 31, 2018 | ||
KMART CORPORATION, a Michigan corporation | |||
By: | /s/ Robert A. Riecker | ||
Name: | Robert A. Riecker | ||
Title: | Chief Financial Officer | ||
Date: | January 31, 2018 | ||
SUBTENANT: | |||
LANDS' END, INC., a Delaware corporation | |||
By: | /s/ James F. Gooch | ||
Name: | James F. Gooch | ||
Title: | Chief Operating Officer/ Chief Financial Officer | ||
Date: | January 31, 2018 | ||
Annex A to Master Sublease Agreement dated April 4, 2014, effective as of February 1, 2018 |
% Rent Location [*****] Gross Sales | ||||||||||||||||||||||
Store Num | Store Name | Leased/Owned | Sq. Ft. | Rent PSF | Full Year | Monthly | Expiration Date | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Jan | Full Year | FY2019 | |
1003 | 1003 SALEM | Lease | 8,532 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1019 | 1019 PLEASANTON | Lease | 8,166 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1024 | 1024 FALLS CHURCH | Lease | 7,472 | [*****] | [*****] | [*****] | 11/30/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1034 | 1034 PITTSBURGH/ROSS PARK | Lease | 16,979 | [*****] | [*****] | [*****] | 4/13/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1053 | 1053 SAUGUS | Lease | 5,565 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1059 | 1059 SEATTLE/SHORELINE | Lease | 6,575 | [*****] | [*****] | [*****] | 4/13/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1062 | 1062 BROOKFIELD | Lease | 9,484 | [*****] | [*****] | [*****] | 3/23/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1064 | 1064 LANGHORNE/OXFORD VLY | Lease | 8,103 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1079 | 1079 PORTLAND WASHINGTON SQ | Lease | 14,142 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1089 | 1089 ANCHORAGE(SUR) | Lease | 7,930 | [*****] | [*****] | [*****] | 4/13/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1112 | 1112 MINNETONKA | Lease | 5,712 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1122 | 1122 MAPLEWOOD | Lease | 6,421 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1131 | 1131 LITTLETON DENVER | Lease | 6,372 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1133 | 1133 LEOMINSTER | Lease | 7,483 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1134 | 1134 MILFORD | Lease | 9,130 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1148 | 1148 VENTURA | Lease | 6,691 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1154 | 1154 WHITEHALL | Lease | 7,401 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1156 | 1156 ROSEVILLE | Lease | 7,565 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1163 | 1163 BURLINGTON | Lease | 12,899 | [*****] | [*****] | [*****] | 4/13/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1170 | 1170 LANSING | Lease | 9,553 | [*****] | [*****] | [*****] | 11/30/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1185 | 1185 ASHEVILLE | Lease | 8,263 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
1193 | 1193 WATERFORD | Lease | 7,484 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1202 | 1202 BEAVERCREEK/DAYTON | Lease | 7,316 | [*****] | [*****] | [*****] | 10/26/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1213 | 1213 AUBURN | Lease | 9,695 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1243 | 1243 HANOVER | Lease | 15,329 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1244 | 1244 YORK/GALLERIA | Lease | 9,706 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1254 | 1254 WILMINGTON | Lease | 7,863 | [*****] | [*****] | [*****] | 4/13/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1273 | 1273 HOLYOKE | Lease | 7,635 | [*****] | [*****] | [*****] | 10/24/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1275 | 1275 ATLANTA/NORTHLAKE | Lease | 7,993 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1284 | 1284 ALEXANDRIA | Lease | 9,608 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1330 | 1330 EVANSVILLE | Lease | 4,495 | [*****] | [*****] | [*****] | 4/13/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1334 | 1334 PITTSBURGH SOUTH HILLS | Lease | 7,909 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1385 | 1385 ATLANTA | Lease | 7,587 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1388 | 1388 COSTA MESA | Lease | 8,042 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1390 | 1390 ANN ARBOR | Lease | 14,168 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1395 | 1395 KNOXVILLE WEST TOWN | Lease | 7,705 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1403 | 1403 NATICK | Lease | 14,466 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1410 | 1410 CANTON | Lease | 8,979 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1414 | 1414 NANUET | Lease | 7,562 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1415 | 1415 CLEARWATER/COUNTRYSIDE | Lease | 6,012 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1424 | 1424 BETHESDA | Lease | 11,680 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1438 | 1438 EL CAJON | Lease | 6,511 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1454 | 1454 BENSALEM/CORNWELLS HTS | Lease | 7,123 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1455 | 1455 WILMINGTON | Lease | 5,047 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1464 | 1464 DEPTFORD | Lease | 7,995 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1478 | 1478 SAN BRUNO | Lease | 7,017 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1490 | 1490 TROY | Lease | 9,074 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
1528 | 1528 SAN RAFAEL | Lease | 6,922 | [*****] | [*****] | [*****] | 4/13/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1538 | 1538 CITRUS HTS SUNRISE | Lease | 8,827 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1560 | 1560 DAYTON DAYTON MALL | Lease | 8,969 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1574 | 1574 MIDDLETOWN | Lease | 8,471 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1584 | 1584 VICTOR | Lease | 7,688 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1623 | 1623 CLAY (SYRACUSE) | Lease | 8,542 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1645 | 1645 BOCA RATON | Lease | 6,696 | [*****] | [*****] | [*****] | 4/13/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1646 | 1646 PINEVILLE | Lease | 5,894 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1658 | 1658 SANTA ROSA | Lease | 3,871 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1674 | 1674 WHITE PLAINS | Lease | 8,729 | [*****] | [*****] | [*****] | 8/31/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1695 | 1695 ALPHARETTA | Lease | 12,110 | [*****] | [*****] | [*****] | 10/19/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1725 | 1725 ANNAPOLIS | Lease | 12,398 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1733 | 1733 YONKERS | Lease | 6,664 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1750 | 1750 ORLAND PARK | Lease | 7,154 | [*****] | [*****] | [*****] | 4/13/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1810 | 1810 CINCINNATI | Lease | 8,305 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1830 | 1830 FT WAYNE | Lease | 6,455 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1844 | 1844 COLUMBIA | Lease | 7,098 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
1984 | 1984 BUFFALO/HAMBURG | Lease | 8,118 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2023 | 2023 CONCORD | Lease | 6,718 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2071 | 2071 CINCINNATI WESTERN HILLS | Lease | 5,937 | [*****] | [*****] | [*****] | 4/13/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2138 | 2138 SANTA BARBARA | Lease | 5,841 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2173 | 2173 SARATOGA | Lease | 6,281 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2212 | 2212 CEDAR RAPIDS | Lease | 4,876 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2239 | 2239 VANCOUVER | Lease | 4,750 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2323 | 2323 HYANNIS | Lease | 7,915 | [*****] | [*****] | [*****] | 11/30/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2353 | 2353 KINGSTON | Lease | 6,207 | [*****] | [*****] | [*****] | 4/13/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
2373 | 2373 NO DARTMOUTH | Lease | 4,076 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2435 | 2435 CHARLOTTESVILLE | Lease | 6,125 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2443 | 2443 MANCHESTER | Lease | 8,961 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2453 | 2453 GLENS FALLS | Lease | 5,266 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2663 | 2663 NEWINGTON/PORTSMOUTH | Lease | 6,938 | [*****] | [*****] | [*****] | 1/31/2019 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2664 | 2664 FREDERICK | Lease | 7,829 | [*****] | [*****] | [*****] | 7/31/2018 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
2694 | 2694 FREDERICKSBURG | Lease | 5,347 | [*****] | [*****] | [*****] | 1/31/2020 | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | |
Total | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | ||||||||
Count | 80 | 80 | 79 | 68 | 68 | 68 | 67 | 66 | 66 | 64 | 63 | 63 | ||||||||||
Adjustment 1 | ||||||||||||||||||||||
Adjustment 2 | ||||||||||||||||||||||
Adjustment 3 | ||||||||||||||||||||||
Revised Totals | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] | [*****] |
ANNEX C | ||||
PERCENTAGE RENT | ||||
Exhibit 10.11 | ||||
***** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. |
• | the "Party" or "Parties") agree as follows: |
1. | Surprise Points Fees. The Parties hereby agree to amend the Agreement by substituting |
4. | Interpretation. Except as expressly amended herein; the Agreement shall continue in full force and effect, in accordance with its terms, without any waiver, amendment or other modification of any provision thereof. In the event of a conflict between any term or condition of the Agreement and this First Amendment, this First Amendment shall govern. |
SEARS HOLDINGS MANAGEMENT | LANDS' END, INC. | ||||
CORPORATION: | |||||
By: | /s/ Michael Anderson | By: | /s/ Michael A. Holahan | ||
Name: | Michael Anderson | Name: | Michael A. Holahan | ||
Title: | VP, SYW | Title: | Vice President Marketing |
Exhibit 10.12 | ||||
***** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. |
1. | Amendment to Term. Effective April 4, 2017, Section 2 of the Agreement is replaced in its entirety with the following: |
2. | Confirmation of Agreement. Except as specifically amended herein, the terms and conditions of the Agreement are confirmed as originally written shall remain in full force and effect. This Amendment supersedes all oral negotiations and prior and contemporaneous writings with respect to the subject matter hereof and is intended by the Parties as the final expression of the agreement with respect to the terms and conditions set forth herein and as the complete and exclusive statement of the terms agreed to by the Parties. If there is any conflict between the terms, conditions and provisions of this Amendment and those of any other agreement or instrument, the terms, conditions and provisions of this Amendment shall prevail. This Amendment may be executed in counterparts, |
LANDS’ END, INC. By (sign): /s/Michael A. Holahan Title: SVP, Multichannel Marketing Date: April 19, 2017 | SEARS HOLDINGS MANAGEMENT CORPORATION By (sign): /s/Eric Jaffe Title: SVP, Shop Your Way Date: April 18, 2017 |
Exhibit 10.13 | ||||
***** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. |
1. | Amendment to Term. Effective May 2, 2017, Section 2 of the Agreement is replaced in its entirety with the following: |
2. | Confirmation of Agreement. Except as specifically amended herein, the terms and conditions of the Agreement are confirmed as originally written shall remain in full force and effect. This Amendment supersedes all oral negotiations and prior and contemporaneous writings with respect to the subject matter hereof and is intended by the Parties as the final expression of the agreement with respect to the terms and conditions set forth herein and as the complete and exclusive statement of the terms agreed to by the Parties. If there is any conflict between the terms, conditions and provisions of this Amendment and those of any other agreement or instrument, the terms, conditions and provisions of this Amendment shall prevail. This Amendment may be executed in counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Amendment by facsimile or electronic mail shall be equally effective as delivery of an original executed counterpart of this Amendment. |
LANDS’ END, INC. By (sign): /s/Michael A. Holahan Title: SVP, Multichannel Marketing Date: May 24, 2017 | SEARS HOLDINGS MANAGEMENT CORPORATION By (sign): /s/Eric Jaffe Title: SVP, Shop Your Way Date: May 2, 2017 |
Exhibit 10.14 | ||||
***** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. |
1. | Amendment to Term. Effective June 5, 2017, Section 2 of the Agreement is replaced in its entirety with the following: |
2. | Confirmation of Agreement. Except as specifically amended herein, the terms and conditions of the Agreement are confirmed as originally written shall remain in full force and effect. This Amendment supersedes all oral negotiations and prior and contemporaneous writings with respect to the subject matter hereof and is intended by the Parties as the final expression of the agreement with respect to the terms and conditions set forth herein and as the complete and exclusive statement of the |
LANDS’ END, INC. By (sign): /s/Michael A. Holahan Title: SVP, Marketing Date: June 14, 2017 | SEARS HOLDINGS MANAGEMENT CORPORATION By (sign): /s/Robert Naedele Title: Chief Commercial Officer, SYW Date: June 14, 2017 |
Exhibit 10.15 | ||||
***** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. |
1. | Amendment to Section 2 (Term). Effective June 29, 2017, Section 2 of the Agreement is replaced in its entirety with the following: |
2. | Amendment to Section 6d (Redemption of Points). Effective June 29, 2017, Section 6d of the Agreement is replaced in its entirety with the following: |
3. | Amendment to Section 6e (Reimbursement or Payment Upon Redemption). Effective June 29, 2017, Section 6e of the Agreement is replaced in its entirety with the following: |
4. | Amendment to Section 6g (Reconciliation and Payment of Points Fees). Effective June 29, 2017, Section 6g of the Agreement is replaced in its entirety with the following: |
5. | Amendment to Section 10d (LE Opt-In Data). Effective April 4, 2014, Section 10 of the Agreement is replaced in its entirety with the following: |
6. | Amendment to Section 17b (Notice). Effective June 29, 2017, the contact information portion of Section 17b of the Agreement is replaced with: |
7. | Amendment to Exhibit 2 Section A1 (base Points Fee). Effective April 4, 2017, Exhibit 2 Section A1 of the Agreement is replaced in its entirety with the following: |
8. | Amendment to Exhibit 2 Section B (Surprise Points Fee). Effective April 4, 2017, Exhibit 2 Section B of the Agreement is replaced in its entirety with the following: |
Redemption Volume per Fiscal Year (beginning FY 2017) | Volume Credit |
[*****] | [*****] |
[*****] | [*****] |
[*****] | [*****] |
[*****] | [*****] |
[*****] | [*****] |
9. | Confirmation of Agreement. Except as specifically amended herein, the terms and conditions of the Agreement are confirmed as originally written shall remain in full force and effect. This Amendment supersedes all oral negotiations and prior and contemporaneous writings with respect to the subject matter hereof and is intended by the Parties as the final expression of the agreement with respect to the terms and conditions set forth herein and as the complete and exclusive statement of the terms agreed to by the Parties. If there is any conflict between the terms, conditions and provisions of this Amendment and those of any other agreement or instrument, the terms, conditions and provisions of this Amendment shall prevail. This Amendment may be executed in counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Amendment by facsimile or electronic mail shall be equally effective as delivery of an original executed counterpart of this Amendment. |
[Signature Page Follows] |
LANDS’ END, INC. By (sign): /s/Michael A. Holahan Title: SVP, Multichannel Marketing Date: 9-6-17 | SEARS HOLDINGS MANAGEMENT CORPORATION By (sign): /s/Jonathan Babb Title: Vice President, Deputy General Counsel and Secretary Date: September 1, 2017 |
Exhibit 10.21 | |||||
LANDS’ END, INC. | |||||
TIME-BASED RESTRICTED STOCK UNIT AGREEMENT | |||||
Name of Grantee: | (the “Grantee”) | ||||
No. of Restricted Stock Units: | |||||
Issuance Date: | (the “Issuance Date”) |
Date of Vesting | Percent Vested | |
[SIGNATURE PAGE FOLLOWS] |
COMPANY | ||||
LANDS’ END, INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
GRANTEE | ||||
Name: |
Exhibit 10.46 | |||
November 13, 2017 | |||
Gill Brown Hong | |||
[Address Omitted] | |||
Dear Gill, |
• | Your offer is contingent upon satisfactory completion of a criminal background check, employment authorization and verification and confirmation 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. |
• | The primary work location will be in our Dodgeville, WI office. All requested business travel and lodging will be at company expense subject to Lands’ End’s applicable Travel & Entertainment Employee Expense Policy. |
• | Annual base salary of $450,000 paid in bi-weekly payments (your first check will be a live check then followed by direct deposit the next pay period). Increases will be determined based on a number of factors, with performance typically being the most significant factor. You will next be eligible for a merit review in May of 2019. |
• | You will receive a one-time cash sign-on bonus of $100,000 (“Sign-On Bonus”). 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. 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). |
• | You will be eligible for an annual target bonus incentive (“AIP”) opportunity of 75% of your base salary. The portion of the bonus target paid each year is based on your performance and the company’s fiscal results. Since you are beginning employment after the start of the fiscal year, your incentive opportunity under the 2017 AIP will be prorated from your start date through February 2, 2018, the last day of the company’s 2017 fiscal year. For fiscal 2018, you will be guaranteed a minimum annual incentive bonus under the 2018 Annual Incentive Plan of $168,750. |
• | You will be eligible to receive a restricted stock unit grant valued at $100,000 as of the grant date. Equity awards are approved by a committee of our Board of Directors and are made quarterly. It is expected that the next quarterly award will be made in early December, soon after the public release of our third quarter results. This grant will be made under the Lands’ End, Inc. 2014 Stock Plan (As Amended and Restated) (“the 2014 Plan”), be subject to the terms of a Restricted Stock Unit Agreement, which will be provided to you and vest 25%, 25% and 50%, on the first, second and third anniversaries of the grant date. |
• | You will be eligible to participate in the Lands' End Retirement Plan, which includes 401(k) employee contribution and Company Match features. Eligibility will start on the first calendar quarter following your hire date. Lands’ End will begin matching your contributions at 50% on the first 6% of your eligible earnings, beginning January 1, 2019, if you work 1,000 hours in 2018. |
• | In recognition of your previous related experience, you will receive 20 business days of vacation as of your start date, with an additional 5 business days after ten years of service. You also will be eligible for up to four (4) personal days per year, after completing six (6) months of service. |
• | With this position, for our 2018 fiscal year, it is our intent to offer an annual long-term incentive with a target value of 100% of your base salary. Further details regarding the Fiscal 2018 LTI target award will be provided following approval by the Compensation Committee. |
• | You will be eligible to receive relocation assistance, which is managed by our third party vendor, Cartus. A Cartus Representative will contact you to schedule an orientation to review key elements of the relocation policy and benefits. To receive this benefit, you will be required to sign the relocation repayment agreement as an initial step in the process with your Cartus Representative. Notwithstanding anything to the contrary in the relocation repayment agreement, you will not be required to repay relocation benefits in the event your employment is terminated by Lands’ End, other than for Cause, or by you for Good Reason (in each case as defined in the ESA) within your first two years of employment. As part of your relocation benefits, you will be eligible for temporary housing for up to ninety (90) days. |
• | 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 (and in the event of any discrepancy between this summary and the ESA, the ESA will govern): If your employment with Lands’ End is terminated by Lands’ End, other than for Cause, or by you for Good Reason (in each case, as defined in the ESA) within your first two years of employment, you will be eligible to receive twenty-four (24) months of salary continuation, equal to your base salary at the time of termination, reduced by any interim earnings you may otherwise receive. If your employment with Lands’ End is terminated by Lands’ End (under the same conditions noted above) after your second full year of employment, you will receive twelve (12) months of salary continuation. Under the ESA, you agree, among other things, not to disclose confidential information and, not to solicit our employees. You also agree not to aid, assist or render services for any Competitive Business (as defined in the ESA) for twenty-four (24) months following termination of employment, if it occurs within your first two years of employment, and for twelve (12) months if it occurs after two years of employment. The non-disclosure, non-solicitation and non-compete provisions apply regardless of whether you are eligible for severance benefits under the ESA. |
• | Your start date will be November 27, 2017. |
Sincerely, | ||||
/s/ Kelly Ritchie | /s/ Gill Brown Hong | |||
Kelly Ritchie | Gill Brown Hong | |||
SVP - Employee Services |
Exhibit 10.47 | |||
EXECUTIVE SEVERANCE AGREEMENT | |||
This Executive Severance Agreement (“Agreement”) is made as of the 2nd day of November 2017, between Lands’ End, Inc., a Delaware corporation (together with its successors, assigns and Affiliates, the “Company”), and Gill Brown Hong (“Executive”). | |||
WHEREAS, in light of the Company’s size and its visibility as a publicly-traded company that reports its results to the public, the Company has attracted attention of other companies and businesses seeking to obtain for themselves or their customers some of the Company’s business acumen and know-how; and | |||
WHEREAS, the Company has shared with Executive certain aspects of its business acumen and know-how as well as specific confidential and proprietary information about the products, markets, processes, costs, developments, ideas, and personnel of the Company; and | |||
WHEREAS, the Company has imbued Executive with certain aspects of the goodwill that the Company has developed with its customers, vendors, representatives and employees; and | |||
WHEREAS, as consideration for entering into this Agreement, the Company is extending to Executive the opportunity to receive severance benefits under certain circumstances as provided in this Agreement; and | |||
WHEREAS, as additional consideration for entering into this Agreement, the Company will grant to Executive restricted stock units pursuant to a Restricted Stock Agreement entered into between the Company and the Executive | |||
NOW, THEREFORE, in consideration of the foregoing, and of the respective covenants and agreements of the parties set forth in this Agreement, the parties hereto agree as follows: | |||
1. Definitions. As used in this Agreement, the following terms have the meanings indicated: | |||
a. “Affiliate” means any subsidiary or other entity that, directly or indirectly through one or more intermediaries, is controlled by Lands’ End, Inc., whether now existing or hereafter formed or acquired. For purposes hereof, “control” means the power to vote or direct the voting of sufficient securities or other interests to elect one-third of the directors or managers or to control the management of such subsidiary or other entity. Notwithstanding the foregoing, if the Executive’s “Salary Continuation” exceeds the “Section 409A Threshold” (as such terms are defined below), then Affiliate shall mean any person with whom the Company is considered to be a single employer under Code Section 414(b) and all persons with whom the Company would be considered a single employer under Code Section 414(c), substituting “50%” for the “80%” standard that would otherwise apply. | |||
b. “Cause” means (i) a material breach by Executive (other than a breach resulting from Executive’s incapacity due to a Disability) of Executive’s duties and responsibilities which breach is demonstrably willful and deliberate on Executive’s part, is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company and is not remedied in a reasonable period of time after receipt of written notice from the Company specifying such breach; (ii) the commission by Executive of a felony; or (iii) dishonesty or willful misconduct in connection with Executive’s employment. | ||
c. “Competitive Business” means any corporation, partnership, association, or other person or entity (including but not limited to Executive) that is listed on Appendix A, each of which Executive acknowledges is a Competitive Business. | ||
Executive acknowledges that the Company shall have the right to propose modifications to Appendix A periodically to include (i) emergent Competitive Businesses in the existing lines of business of the Company, and (ii) Competitive Businesses in lines of business that are new for the Company, in each case, with the prior written consent of Executive, which consent shall not be unreasonably withheld. | ||
d. “Code” means the Internal Revenue Code of 1986, as amended | ||
e. “Confidential Information” means information related to the Company’s business, not generally known in the trade or industry, which Executive learns or creates during the period of Executive’s Company Employment, which may include but is not limited to product specifications, manufacturing procedures, methods, equipment, compositions, technology, formulas, know-how, research and development programs, sales methods, customer lists, customer usages and requirements, personnel evaluations and compensation data, computer programs and other confidential technical or business information and data that is not otherwise in the public domain. | ||
f. “Disability” means disability as defined under the Company’s long-term disability plan (regardless of whether Executive is a participant under such plan). | ||
g. “Executive’s Company Employment” means the time (including time prior to the date hereof) during which Executive is employed by any entity comprised within the definition of “Company”, regardless of any change in the entity actually employing Executive. | ||
h. “Good Reason” shall mean, without Executive’s written consent, (i) a reduction of more than ten percent (10%) in the sum of Executive’s annual base salary and target bonus under Company’s Annual Incentive Plan; (ii) Executive’s mandatory relocation to an office more than fifty (50) miles from the | ||
primary location at which Executive was previously required to perform Executive’s duties; or (iii) any other action or inaction that constitutes a material breach of the terms of this Agreement, including failure of a successor company to assume or fulfill the obligations under this Agreement. In each case, Executive must provide Company with written notice of the facts giving rise to a claim that “Good Reason” exists for purposes of this Agreement, within thirty (30) days of the initial existence of such Good Reason event, and Company shall have the right to remedy such event within sixty (60) days after receipt of Executive’s written notice. “Good Reason” shall cease to exist, and may not form the basis for claiming any compensation or benefits under this Agreement, if any of the following occurs: | ||
i. Executive fails to provide the above-referenced written notice of the Good Reason event within thirty (30) days of its occurrence; | ||
ii. Company remedies the Good Reason event within the above-referenced sixty (60) day remediation period; or | ||
iii. Executive fails to resign within ninety (90) days of Executive’s written notice of the Good Reason event. | ||
i. “Salary Continuation” means continuation of base salary, based on Executive’s annual base salary rate as of the date Executive’s Company Employment terminates (“Date of Termination”), payable for a period of (i) twenty-four (24) months following the Date of Termination, if the Date of Termination occurs prior to the second anniversary of Executive’s commencement of employment with the Company, and (ii) twelve (12) months following the Date of Termination, if the Date of Termination occurs after the second anniversary of Executive’s commencement of employment with the Company, (as applicable, “Salary Continuation Period”) | ||
j. “Section 409A Threshold” means an amount equal to two times the lesser of (i) Executive’s base salary for services provided to the Company as an employee for the calendar year preceding the calendar year in which Executive has a Separation from Service; or (ii) the maximum amount that may be taken into account under a qualified plan in accordance with Code Section 401(a)(17) for the calendar year in which the Executive has a Separation from Service. In all events, this amount shall be limited to the amount specified under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A) or any successor thereto. | ||
k. “Separation from Service” means a “separation from service” with the Company within the meaning of Code Section 409A (and regulations issued thereunder). Notwithstanding anything herein to the contrary, the fact that Executive is treated as having incurred a Separation from Service under Code Section 409A and the terms of this Agreement shall not be determinative, or in | ||
any way affect the analysis, of whether Executive has retired, terminated employment, separated from service, incurred a severance from employment or become entitled to a distribution, under the terms of any retirement plan (including pension plans and 401(k) savings plans) maintained by the Company. | ||
l. “Specified Employee” means a “specified employee” under Code Section 409A (and regulations issued thereunder). | ||
m. “Trade Secret(s)” means information, including a formula, pattern, compilation, program, device, method, technique or process, that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and that is the subject of efforts to maintain its secrecy that are reasonable under the circumstances. | ||
2. Employment. During Executive’s Company Employment, Executive agrees to devote all of Executive’s professional time and attention to the duties required by such Company Employment and to the best interests of the Company, and to engage in other business, professional or philanthropic activities only with the prior written approval of the Company. Executive shall also comply with all generally applicable policies of the Company, including but not limited to the Company’s Code of Conduct, as such policies may be amended from time to time. Except as may be otherwise expressly provided in any written agreement between the Company and Executive other than this Agreement, Executive’s Company Employment is terminable by either party at will. | ||
3. Severance. | ||
a. If Executive’s Company Employment is involuntarily terminated without Cause, or if Executive resigns for Good Reason, Executive shall be entitled to the following: | ||
i. Salary Continuation. | ||
ii. Continuation of health, dental and vision coverage at the applicable active employee rate until the end of the pay period that includes the last day of the Salary Continuation Period, on the same terms as they were provided immediately prior to the Date of Termination, subject to the Company’s ability to continue to make these payments without incurring discrimination penalties under the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, and all applicable regulations and guidance thereunder. Any such coverage provided during the Salary Continuation Period shall not run concurrently with the applicable continuation period in accordance with the provisions of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). If Executive | ||
becomes eligible to participate in another medical or dental benefit plan or arrangement through another employer or spousal plan during such period, the Company shall no longer pay for continuation coverage benefits and Executive shall be required to pay the full COBRA premium. Executive is required to notify the Company within thirty (30) days of obtaining other medical or dental benefits coverage. Any coverage provided under this Section 3(a)(ii) shall be subject to such amendments (including termination) of the coverage as the Company shall make from time to time at its sole discretion, including but not limited to changes in covered expenses, employee contributions for premiums, and co-payment obligations, and shall be, to the fullest extent permitted by law, secondary to any other coverage Executive may obtain from subsequent employment or any other source. | ||
iii. Reasonable outplacement services, mutually agreed upon by the Company and Executive from those vendors used by Company as of the Date of Termination, for a period of up to twelve (12) months or until subsequent employment is obtained, whichever occurs first. | ||
iv. Notwithstanding any limitation on the payment of benefits upon termination of employment that may be provided for under its vacation pay policy, Company shall provide Executive a lump sum payment, promptly after the expiration of the revocation period set forth in Appendix B, of the unused vacation pay benefits which Executive had been granted prior to the Date of Termination to the maximum extent permitted pursuant to Section 409A of the Code. | ||
Executive shall not be entitled to continuation of compensation or benefits if Executive’s employment terminates for any other reason, including due to death or Disability, except as may be provided under any other agreement or benefit plan applicable to Executive at the time of the termination of Executive’s employment. Executive shall also not be entitled to Salary Continuation or any of the other benefits above if Executive does not meet all of the other requirements under, or otherwise violates the terms of, this Agreement, including the requirements under Section 8. Except as provided in this Section 3, all other compensation and benefits shall terminate as of the Date of Termination. | ||
b. Subject to subsection (c), Company shall pay Executive Salary Continuation in substantially equal installments on each regular salary payroll date for the Salary Continuation Period, except as otherwise provided in this Agreement. Salary Continuation payments shall be subject to withholdings for federal and state income taxes, FICA, Medicare and other legally required or |
authorized deductions. Notwithstanding the foregoing, the obligations of the Company to pay Salary Continuation shall be reduced on a dollar-for-dollar basis (but not below zero) by the amount, if any, of fees, salary or wages that Executive earns from a subsequent employer (including those arising from self-employment) during the Salary Continuation Period. Executive shall promptly notify the Company of any subsequent employment or self-employment and the amount of any such fees, salary, wages or any other form of compensation earned. Any such fees, salary, wages or compensation shall reduce the Salary Continuation payments in reverse chronological order, beginning with the Salary Continuation payment that would be the final Salary Continuation payment in the absence of such reduction. For avoidance of doubt, Executive shall not be obligated to seek affirmatively or accept an employment, contractor, consulting or other arrangement to mitigate Salary Continuation. Further, to the extent Executive does not execute and timely submit the General Release and Waiver (in accordance with Section 8) by the deadline specified therein, or revokes such General Release and Waiver, Salary Continuation payments shall terminate and forever lapse, and Executive shall be required immediately to reimburse the Company for any portion of the Salary Continuation paid during the Salary Continuation Period. To the extent such Salary Continuation was paid in a calendar year prior to the calendar year in which such reimbursement is received by the Company, the reimbursement shall be in the gross amount of such Salary Continuation on a pre-tax-withholding basis. To the extent such Salary Continuation was paid in the same calendar year as the reimbursement is received by the Company, the reimbursement shall be in the net amount of such Salary Continuation on an after-tax-withholding basis. In the event such reimbursement is required with respect to Salary Continuation payments that are reported on a Form W-2 for Executive, Executive shall be solely responsible for claiming any related tax deduction, and the Company shall not be required to issue a corrected Form W-2. | ||
c. Notwithstanding anything in this Section 3 to the contrary, if the Salary Continuation payable to Executive during the first six (6) months after Executive’s Separation from Service would exceed the Section 409A Threshold and if, as of the date of the Separation from Service, Executive is a Specified Employee, then payment shall be made to Executive on each regular salary payroll date during the six (6) months of the Salary Continuation Period until the aggregate amount received equals the Section 409A Threshold. Any portion of the Salary Continuation in excess of the Section 409A Threshold that would otherwise be paid during such six (6) months, and any portion of the Salary Continuation that is otherwise subject to Section 409A, shall instead be paid to Executive in a lump sum payment on the date that is six (6) months and one (1) day after the date of Executive’s Separation from Service. | ||
4. Confidentiality. In addition to all duties of loyalty imposed on Executive by law or otherwise, during the term of Executive’s Company Employment and for two years following the termination of such employment for any reason, Executive shall maintain |
Confidential Information in confidence and secrecy and shall not disclose Confidential Information or use it for the benefit of any person or organization (including Executive) other than the Company without the prior written consent of an authorized officer of the Company (except for disclosures to persons acting on the Company’s behalf with a need to know such information). | ||
5. Non-Disclosure of Trade Secrets. During Executive’s Company Employment, Executive shall preserve and protect Trade Secrets of the Company from unauthorized use or disclosure; and after termination of such employment, Executive shall not use or disclose any Trade Secret of the Company for so long as that Trade Secret remains a Trade Secret. | ||
6. Third-Party Confidentiality. Executive shall not disclose to the Company, use on its behalf, or otherwise induce the Company to use any secret or confidential information belonging to persons or entities not affiliated with the Company, which may include a former employer of Executive, if Executive then has an obligation or duty to any person or entity (other than the Company) to not disclose such information to other persons or entities, including the Company. Executive acknowledges that the Company has disclosed that the Company is now, and may be in the future, subject to duties to third parties to maintain information in confidence and secrecy. By executing this Agreement, Executive consents to be bound by any such duty owed by the Company to any third party. | ||
7. Work Product. Executive acknowledges that all ideas, inventions, innovations, improvements, developments, methods, designs, analyses, reports, databases, and any other similar or related information (whether patentable or not) which relate to the actual or anticipated business, research and development, or existing or known future products or services of the Company which are or were conceived, developed or created by Executive (alone or jointly with others) during Executive’s Company Employment (the "Work Product") is and shall remain the exclusive property of the Company. Executive acknowledges and agrees that all copyrightable Work Product was created in Executive’s capacity as an employee of Lands’ End and within the scope of Executive’s Company Employment, and thus constitutes a "work made for hire" under the Copyright Act of 1976, as amended. Executive hereby assigns to Company all right, title and interest in and to all Work Product, and agrees to perform all actions reasonably requested by Company to establish, confirm or protect Company’s ownership thereof (including, without limita-tion, executing assignments, powers of attorney and other instruments). | ||
8. General Release and Waiver. Upon or following Executive’s Date of Termination potentially entitling Executive to Salary Continuation and other benefits under Section 3 above, Executive will execute a binding general release and waiver of claims in a form to be provided by the Company (“General Release and Waiver”). The General Release and Waiver will be in a form substantially similar to the attached Appendix B. If the General Release and Waiver is not signed within the time it requires or is signed but subsequently revoked, Executive will not continue to receive any Salary Continuation otherwise payable, and shall reimburse any Salary Continuation previously paid. | ||
9. Noncompetition. During Executive’s Company Employment, and for a period of time after the Date of Termination equal to (i) twenty-four (24) months, if the Date of Termination occurs prior to the second anniversary of Executive’s commencement of employment with the Company, or (ii) twelve (12) months, if the Date of Termination occurs after the second anniversary of the Executive’s commencement of employment (but regardless whether the Executive is receiving Salary Continuation or other benefits under Section 3), Executive shall not, directly or indirectly, participate in, consult with, be employed by, or assist with the organization, planning, ownership, financing, management, operation or control of any Competitive Business. | ||
10. Nonsolicitation. During Executive’s Company Employment and for eighteen (18) months following the termination of such employment for any reason (provided however, that this obligation shall remain in effect for twenty-four (24) months in the event that the Salary Continuation Period is twenty-four (24) months), Executive shall not, directly or indirectly, either by himself or by providing substantial assistance to others (i) solicit any employee of the Company to terminate employment with the Company, or (ii) employ or seek to employ, or cause or assist any other person, company, entity or business to employ or seek to employ, any individual who was an employee of Company as of Executive’s Date of Termination. | ||
11. Future Employment. During Executive’s Company Employment and for eighteen (18) months following the termination of such employment for any reason (provided however, that this obligation shall remain in effect for twenty-four (24) months in the event that the Salary Continuation Period is twenty-four (24) months), before accepting any employment with any Competitive Business (whether or not Executive believes such employment is prohibited by Section 9), Executive shall disclose to the Company the identity of any such Competitive Business and a complete description of the duties involved in such prospective employment, including a full description of any business, territory or market segment to which Executive will be assigned. Further, during Executive’s Company Employment and for eighteen (18) months following the termination of such employment for any reason (provided however, that this obligation shall remain in effect for twenty-four (24) months in the event that the Salary Continuation Period is twenty-four (24) months), Executive agrees that, before accepting any future employment, Executive will provide a copy of this Agreement to any prospective employer of Executive, and Executive hereby authorizes the Company to do likewise, whether before or after the outset of the future employment. | ||
12. Nondisparagement; Cooperation. During Executive’s Company Employment and for two (2) years following the termination of such employment for any reason, Executive (i) will not criticize or disparage the Company or its directors, officers, employees or products, and (ii) will fully cooperate with Company in all investigations, potential litigation or litigation in which Company is involved or may become involved with respect to matters that relate to Executive’s Company Employment (other than any such investigations, potential litigation or litigation between Company and Executive); provided, that with regard to Executive’s duties under clause (ii), Executive shall be reimbursed for reasonable travel and out-of-pocket expenses related thereto, but shall otherwise not be entitled to any additional compensation. | ||
13. Notices. All notices, request, demands and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand or when mailed by United States certified or registered mail with postage prepaid addressed as follows: | ||
a. If to Executive, to the address set forth by Executive on the signature page of this Agreement or to such other person or address which Executive shall furnish to the Company in writing pursuant to the above. | ||
b. If to the Company, to the attention of the Company’s General Counsel at the address set forth on the signature page of this Agreement or to such other person or address as the Company shall furnish to Executive in writing pursuant to the above | ||
14. Enforceability. Executive recognizes that irreparable injury may result to the Company, its business and property, and the potential value thereof in the event of a sale or other transfer, if Executive breaches any of the restrictions imposed on Executive by this Agreement, and Executive agrees that if Executive shall engage in any act in violation of such provisions, then the Company shall be entitled, in addition to such other remedies and damages as may be available, to an injunction prohibiting Executive from engaging in any such act. | ||
15. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon and enforceable by Lands’ End, Inc., its successors, assigns and Affiliates, all of which (other than Lands’ End, Inc.) are intended third-party beneficiaries of this Agreement. Executive hereby consents to the assignment of this Agreement to any person or entity. | ||
16. Validity. Any invalidity or unenforceability of any provision of this Agreement is not intended to affect the validity or enforceability of any other provision of this Agreement, which the parties intend to be severable and divisible, and to remain in full force and effect to the greatest extent permissible under applicable law. | ||
17. Choice of Law; Jurisdiction. Except to the extent superseded or preempted by federal U.S. law, the rights and obligations of the parties and the terms of this Agreement shall be governed by and construed in accordance with the domestic laws of the State of Wisconsin, but without regard to the State of Wisconsin's conflict of laws rules. The parties further agree that the state and federal courts in Madison, Wisconsin, shall have exclusive jurisdiction over any claim which is any way arises out of Executive’s employment with the Company, including but not limited to any claim seeking to enforce the provisions of this Agreement. | ||
18. Section 409A Compliance. To the extent that a payment or benefit under this Agreement is subject to Code Section 409A, it is intended that this Agreement as applied to that payment or benefit comply with the requirements of Code Section 409A, and the Agreement shall be administered and interpreted consistent with this intent. | ||
19. Miscellaneous. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. This Agreement may be modified only by a written agreement signed by Executive and a duly authorized officer of the Company. | ||
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written. | ||
EXECUTIVE | ||
/s/ Gill Brown Hong | ||
Address: [Address Omitted] | ||
LANDS' END, INC. | ||
5 Lands' End Lane | ||
Dodgeville, WI 53595 | ||
By: /s/ Kelly Ritchie | ||
Its: SVP, Employee and Customer Services | ||
Appendix A | ||
COMPETITIVE BUSINESSES | ||
The following companies (including affiliates and subsidiaries within the same controlled group of corporations) are included within the definition of "Competitive Businesses", as referred to under subsection 1(c) of the Executive Severance Agreement ("Agreement"): | ||
Ann Taylor | ||
Bonobos | ||
Brooks Brothers | ||
Chico's | ||
Eddie Bauer | ||
J. C. Penney Company Inc. | ||
J. Crew | ||
Jos. A. Banks | ||
Kohl’s | ||
L.L. Bean | ||
Macy’s | ||
Next Retail | ||
Polo Ralph Lauren | ||
Target | ||
Vineyard Vines | ||
Appendix B | ||
NOTICE: YOU MAY CONSIDER THIS GENERAL RELEASE AND WAIVER FOR UP TO TWENTY-ONE (21) DAYS. YOU MAY NOT SIGN IT UNTIL ON OR AFTER YOUR LAST DAY OF WORK. IF YOU DECIDE TO SIGN IT, YOU MAY REVOKE THE GENERAL RELEASE AND WAIVER WITHIN SEVEN (7) DAYS AFTER SIGNING. ANY REVOCATION WITHIN THIS PERIOD MUST BE IMMEDIATELY SUBMITTED IN WRITING TO GENERAL COUNSEL, LANDS’ END, INC., 5 LANDS’ END LANE, DODGEVILLE, WISCONSIN 53595. YOU MAY WISH TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS DOCUMENT. | ||
GENERAL RELEASE AND WAIVER | ||
In consideration of the severance benefits that are described in the attached Executive Severance Agreement, I, for myself, my heirs, administrators, representatives, executors, successors and assigns, do hereby release Lands’ End, Inc., its current and former agents, subsidiaries, affiliates, related organizations, employees, officers, directors, shareholders, attorneys, successors, and assigns (collectively, “Lands’ End”) from any and all claims of any kind whatsoever, whether known or unknown, arising out of, or connected with, my employment with Lands’ End and the termination of my employment. Without limiting the general application of the foregoing, this General Release & Waiver releases, to the fullest extent permitted under law, all contract, tort, defamation, and personal injury claims; all claims based on any legal restriction upon Lands’ End’s right to terminate my employment at will; Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq.; the Age Discrimination in Employment Act, 29 U.S.C. §§ 621 et seq.; the Americans with Disabilities Act, 42 U.S.C. §§ 12101 et seq.; the Rehabilitation Act of 1973, 29 U.S.C. §§ 701 et seq.; the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq. (“ERISA”); 29 U.S.C. § 1985; the Civil Rights Reconstruction Era Acts, 42 U.S.C. §§ 1981-1988; the National Labor Relations Act, 29 U.S.C. §§ 151 et seq.; the Family & Medical Leave Act, 29 U.S.C. §§ 2601 et seq.; the Immigration & Nationality Act, 8 U.S.C. §§ 1101 et seq.; Executive Order 11246 and all regulations thereunder; the Wisconsin Fair Employment Act, Wis. Stat. §§ 111.31-111.395; the Wisconsin Family & Medical Leave Act, Wis. Stat. § 103.10; the Wisconsin Worker’s Compensation Act, Wis. Stat. Ch. 102; and any and all other state, federal or local laws of any kind, whether administrative, regulatory, statutory or decisional. | ||
This General Release & Waiver does not apply to any claims that may arise after the date I sign this General Release & Waiver. Also excluded from this General Release & Waiver are any claims that cannot be waived by law, including but not limited to (1) my right to file a charge with or participate in an investigation conducted by the Equal Employment Opportunity Commission and (2) my rights or claims to benefits accrued under benefit plans maintained by Lands’ End and governed by ERISA. I do, however, waive any right to any monetary or other relief flowing from any agency or third-party claims or charges, including any charge I might file with any federal, state or local agency. I warrant and represent that I have not filed any complaint, charge, or lawsuit against Lands’ End with any governmental agency or with any court. | ||
I also waive any right to become, and promise not to consent to become a participant, member, or named representative of any class in any case in which claims are asserted against Lands’ End that are related in any way to my employment or termination of employment at Lands’ End, and that involve events that have occurred as of the date I sign this General Release and Waiver. If I, without my knowledge, am made a member of a class in any proceeding, I will opt out of the class at the first opportunity afforded to me after learning of my inclusion. In this regard, I agree that I will execute, without objection or delay, an “opt-out” form presented to me either by the court in which such proceeding is pending, by class counsel or by counsel for Lands’ End. |
I have read this General Release and Waiver and understand all of its terms. | ||
I have signed it voluntarily with full knowledge of its legal significance. | ||
I have had the opportunity to seek, and I have been advised in writing of my right to seek, legal counsel prior to signing this General Release & Waiver. | ||
I was given at least twenty-one (21) days to consider signing this General Release & Waiver. I agree that any modification of this General Release & Waiver Agreement will not restart the twenty-one (21) day consideration period. | ||
I understand that if I sign the General Release & Waiver, I can change my mind and revoke it within seven (7) days after signing it by notifying the General Counsel of Lands’ End in writing at Lands’ End, Inc., 5 Lands’ End Lane, Dodgeville, Wisconsin 53595. I understand the General Release & Waiver will not be effective until after the seven (7) day revocation period has expired. | ||
I understand that the delivery of the consideration herein stated does not constitute an admission of liability by Lands’ End and that Lands’ End expressly denies any wrongdoing or liability. | ||
Date: SAMPLE ONLY -DO NOT DATE | Signed by: SAMPLE ONLY -DO NOT SIGN | |
Witness by: SAMPLE ONLY -DO NOT SIGN | ||
Names | State or Other Jurisdiction of Organization |
Lands' End Canada Outfitters ULC | Canada |
Lands' End Direct Merchants, Inc. | Delaware |
Lands' End International, Inc. | Delaware |
Lands' End Europe Limited | England & Wales |
Lands' End GmbH | Germany |
Lands' End Japan, Inc. | Delaware |
Lands' End Japan, KK | Japan |
Lands' End Publishing, LLC | Delaware |
LEGC, LLC | Virginia |
1. | I have reviewed this annual report on Form 10-K of Lands’ End, Inc.; |
2. | 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; |
3. | 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; |
4. | 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: |
(a) | 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; |
(b) | 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; |
(c) | 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 |
(d) | 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 |
5. | 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): |
(a) | 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 |
(b) | 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. |
/s/ Jerome S. Giffith |
Jerome S. Griffith |
Chief Executive Officer and President (Principal Executive Officer) |
Lands’ End, Inc. |
1. | I have reviewed this annual report on Form 10-K of Lands’ End, Inc.; |
2. | 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; |
3. | 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; |
4. | 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: |
(a) | 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; |
(b) | 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; |
(c) | 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 |
(d) | 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 |
5. | 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): |
(a) | 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 |
(b) | 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. |
/s/ James F. Gooch |
James F. Gooch |
Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer (Principal Financial Officer) |
Lands’ End, Inc. |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Jerome S. Griffith |
Jerome S. Griffith |
Chief Executive Officer and President (Principal Executive Officer) |
/s/ James F. Gooch |
James F. Gooch |
Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer (Principal Financial Officer) |
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Document and Entity Information - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2018 |
Mar. 29, 2018 |
Jul. 28, 2017 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Lands' End, Inc. | ||
Entity Central Index Key | 0000799288 | ||
Current Fiscal Year End Date | --02-02 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 02, 2018 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 32,131,970 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 106.5 |
Consolidated Statements of Comprehensive Income Statement - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
|
Net income (loss) | $ 28,195 | $ (109,782) | $ (19,548) |
Other comprehensive income (loss), net of tax | |||
Foreign currency translations adjustments | 4,282 | (3,042) | (2,086) |
Comprehensive income (loss) | $ 32,477 | $ (112,824) | $ (21,634) |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Feb. 02, 2018 |
Jan. 27, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Par value of stock | $ 0.01 | $ 0.01 |
Shares authorized for issuance | 480,000,000 | 480,000,000 |
Common Stock, Shares, Issued | 32,101,793 | 32,029,359 |
Background and Basis of Presentation |
12 Months Ended |
---|---|
Feb. 02, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | BACKGROUND AND BASIS OF PRESENTATION Description of Business Lands' End, Inc. ("Lands' End" or the "Company") is a leading multi-channel retailer of casual clothing, accessories and footwear, as well as home products. Lands' End offers products through catalogs, online at www.landsend.com and affiliated specialty and international websites, and through retail locations, primarily at Lands' End Shops at Sears and Lands' End stores. Terms that are commonly used in the Company's notes to consolidated financial statements are defined as follows: •ABL Facilities - Collectively the Prior ABL Facility and the Current ABL Facility •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 •ASU - Financial Accounting Standards Board Accounting Standards Update •CAM - Common area maintenance for leased properties •Current ABL Facility - Asset-based senior secured credit agreement, dated as of November 16, 2017, with Wells Fargo Bank, N.A. and certain other lenders •Debt Facilities - Collectively, the ABL Facilities and the Term Loan Facility •Deferred Awards - Time vesting stock awards •EPS - Earnings per share •ERP - Enterprise resource planning software solutions •ESL - ESL Investments, Inc. and its investment affiliates, including Edward S. Lampert •FASB - Financial Accounting Standards Board •First Quarter 2017 - The 13 weeks ended April 28, 2017 •Fiscal 2019 - The 52 weeks ended January 31, 2020 •Fiscal 2018 - The Company's next fiscal year representing the 52 weeks ending February 1, 2019 •Fiscal 2017 - The 53 weeks ended February 2, 2018 •Fiscal 2016 - The 52 weeks ended January 27, 2017 •Fiscal 2015 - The 52 weeks ended January 29, 2016 •Fiscal 2014 - The 52 weeks ended January 30, 2015 •Fourth Quarter 2017 - The 14 weeks ended February 2, 2018 •Fourth Quarter 2016 - The 13 weeks ended January 27, 2017 •GAAP - Accounting principles generally accepted in the United States •Kmart Holding Corporation - a subsidiary of Sears Holdings Corporation •LIBOR - London inter-bank offered rate •Performance Awards - Performance-based stock awards •Prior ABL Facility - Asset-based senior secured credit agreements, dated as of April 4, 2014, with Bank of America, N.A. and certain other lenders, terminated November 16, 2017 •Option Awards - Stock option awards •Sears Holdings or Sears Holdings Corporation - Sears Holdings Corporation, a Delaware corporation, and its consolidated subsidiaries •Sears Roebuck - Sears, Roebuck and Co., a subsidiary of Sears Holdings Corporation •SEC - United States Securities and Exchange Commission •Second Quarter 2016 - The 13 weeks ended July 29, 2016 •Separation - On April 4, 2014 Sears Holdings distributed 100% of the outstanding common stock of Lands' End to its shareholders •SHMC - Sears Holdings Management Corporation, a subsidiary of Sears Holdings Corporation •SHCP - SHC Promotions LLC, a subsidiary of Sears Holdings Corporation •SYW - Shop Your Way member loyalty program •Tax Act - The Tax Cuts and Jobs Act passed by the United States government on December 22, 2017 •Tax Sharing Agreement - A tax sharing agreement entered into by Sears Holdings Corporation and Lands' End in connection with the Separation •Term Loan Facility - Term loan credit agreements, dated as of April 4, 2014, with Bank of America, N.A. and certain other lenders •UK Borrower - A United Kingdom subsidiary borrower of Lands' End under the Prior ABL Facility •UTBs - Gross unrecognized tax benefits 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 are of a normal and recurring nature necessary for a fair presentation of the results for the periods presented have been reflected. Dollar amounts are reported in thousands, except per share data, unless otherwise noted. |
Summary of Significant Accounting Policies |
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Feb. 02, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies and Recent Accounting Pronouncements | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fiscal Year The Company's fiscal year end is on the Friday preceding the Saturday closest to January 31 each year. The fiscal periods in this report are presented as follows, unless the context otherwise requires:
Seasonality The Company's operations have historically been seasonal, with a disproportionate amount of net revenue occurring in the fourth fiscal quarter, reflecting increased demand during the year-end holiday selling season. The impact of seasonality on results of operations is more pronounced since the level of certain fixed costs, such as occupancy and overhead expenses, do not vary with sales. The Company's results of operations also may fluctuate based upon such factors as the timing of certain holiday seasons and promotions, the amount of net revenue contributed by new and existing stores, the timing and level of markdowns, competitive factors, weather and general economic conditions. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reportable amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and cash equivalents Cash and cash equivalents consist of highly liquid temporary instruments purchased with original maturities of three months or less and includes deposits in-transit from banks for payments related to third-party credit card and debit card transactions within cash. Restricted cash The Company classifies cash balances pledged as collateral as Restricted cash on the Consolidated Balance Sheets. Allowance for Doubtful Accounts The Company provides an allowance for doubtful accounts based on both historical experience and specific identification. Allowances for doubtful accounts on accounts receivable balances were $0.6 million as of February 2, 2018 and January 27, 2017. Accounts receivable balance is presented net of the Company's allowance for doubtful accounts and is comprised of various customer-related accounts receivable. Changes in the balance of the allowance for doubtful accounts are as follows:
Inventory Inventories primarily consist of merchandise purchased for resale. For financial reporting and tax purposes, the Company's United States inventory, primarily merchandise held for sale, is stated at last-in, first-out ("LIFO") cost, which is lower than market. The Company accounts for its non-United States inventory on the first-in, first-out ("FIFO") method. The United States inventory accounted for using the LIFO method was 88% and 90% of total inventory as of February 2, 2018 and January 27, 2017, respectively. If the FIFO method of accounting for inventory had been used, the effect on inventory would have been $1.0 million and $0.3 million as of February 2, 2018 and January 27, 2017, respectively. The Company maintains a reserve for excess and obsolete inventory. The reserve is calculated based on historical experience related to liquidation/disposal of identified inventory. The excess and obsolescence reserve balances were $12.1 million and $20.1 million as of February 2, 2018 and January 27, 2017, respectively. In Fiscal 2016, the Company sold approximately $3.8 million of inventory in exchange for marketing trade credits. This was recorded as a non-monetary transaction and the trade credits receivable was recorded at the value of the inventory exchanged. The Company had approximately $0.9 million and $1.0 million of trade credits receivable recorded in Accounts receivable, net as of both February 2, 2018 and January 27, 2017, respectively, and an additional $3.5 million and $3.6 million of trade credits receivable recorded in Other assets as of February 2, 2018 and January 27, 2017, respectively, based on the time period in which the credits are expected to be used. Trade credit receivable balances include credits recorded in prior years. Deferred Catalog Costs and Marketing Costs incurred for direct response marketing consist primarily of catalog production and mailing costs that are generally amortized within two months from the date catalogs are mailed. Unamortized marketing costs reported as prepaid assets were $13.7 million and $12.7 million as of February 2, 2018 and January 27, 2017, respectively. The Company expenses the costs of marketing for website, magazine, newspaper, radio and other general media when the marketing takes place. Marketing expenses, including catalog costs amortization, website-related costs and other print media were $186.4 million, $193.2 million and $199.0 million for Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. These costs are included within Selling and administrative expenses in the accompanying Consolidated Statements of Operations. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. Additions and substantial improvements are capitalized and include expenditures that materially extend the useful lives of existing facilities and equipment. Maintenance and repairs that do not materially improve or extend the lives of the respective assets are expensed as incurred. As of the balance sheet dates, Property and equipment, net consisted of the following:
As of February 2, 2018 and January 27, 2017, assets in development relate primarily to technological investments in the ERP system. Assets placed in service related to the ERP system as of February 2, 2018 were $35.5 million. Depreciation expense is recorded over the estimated useful lives of the respective assets using the straight-line method. Leasehold improvements are depreciated over the shorter of the associated lease term or the estimated useful life of the asset. Depreciation expense was $24.9 million, $19.0 million and $17.4 million for Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. Impairment of Property and Equipment Property and equipment are subject to a review for impairment if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the sum of the expected future undiscounted cash flows generated by an asset or asset group is less than its carrying amount, the Company then determines the fair value of the asset generally by using a discounted cash flow model. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value as determined based on quoted market prices or through the use of other valuation techniques. There were no impairments of property and equipment recognized in Fiscal 2017, Fiscal 2016 or Fiscal 2015. Goodwill and Indefinite-lived Intangible Asset Impairment Assessments Goodwill and the indefinite-lived trade name intangible asset are tested separately for impairment on an annual basis, or are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company's goodwill and trade name intangible asset were originally valued in connection with Kmart Holding Corporation's acquisition of Sears Roebuck in March 2005. The Company's impairment evaluation contains multiple uncertainties because it requires management to make assumptions and to apply judgment to estimate future cash flows and asset fair values, including forecasting cash flows under different scenarios. Lands' End performs annual goodwill and indefinite-lived intangible asset impairment tests on the last day of the Company's November accounting period each year and updates the tests between annual tests if events or circumstances occur that would more likely than not reduce the fair value of a reporting unit or indefinite-lived intangible asset below its carrying amount. However, if actual results fall short of the Company's estimates and assumptions used in estimating future cash flows and asset fair values, the Company may be exposed to losses that could be material. Goodwill impairment assessments. Our goodwill resides in the Direct reporting unit. The Company tests goodwill for impairment using a one-step quantitative test. The quantitative test compares the reporting unit's fair value to its carrying value. An impairment is recorded for any excess carrying value above the reporting unit's fair value, not to exceed the amount of goodwill. The Company estimates fair value using a discounted cash flow model, commonly referred to as the income approach. The income approach uses a reporting unit's projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital that reflects current market conditions appropriate to the Company's reporting unit. The projection uses management's best estimates of economic and market conditions over the projected period using the best information available, including growth rates in revenues, costs, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. This approach is consistent with the annual impairment evaluation for Fiscal 2016. The Company adjusted the valuation methodology in Fiscal 2016 to only rely on the discounted cash flow valuation due to the lack of comparable market participants in both Fiscal 2017 and Fiscal 2016. In Fiscal 2015, a market approach was also used, and the Company's final estimate of the fair value of the reporting unit was developed by weighting the fair values determined through both the market participant and income approaches. The market approach determines a value of the reporting unit by deriving market multiples for the reporting unit based on assumptions potential market participants would use in establishing a bid price for the reporting unit, however, this method is dependent on the availability of comparable market participant information. If the carrying value of the reporting unit is higher than its fair value, there is an indication that impairment may exist. During Fiscal 2017, Fiscal 2016 and Fiscal 2015, the fair value of the reporting unit exceeded the carrying value by 22.9%, 17.1% and 23.8%, respectively, and as such, the Company did not record any goodwill impairment charges. Indefinite-lived intangible asset impairment assessments. The Company's indefinite-lived intangible asset, the Lands' End trade name, resides in the Direct reporting unit. Lands' End reviews the trade name for impairment by comparing the carrying amount to its fair value. The Company considers the income approach when testing the indefinite-lived intangible asset for impairment on an annual basis. Lands' End determined that the income approach, specifically the relief from royalty method, was most appropriate for analyzing the Company's indefinite-lived asset. This method is based on the assumption that, in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset class. The relief from royalty method involves two steps: (1) estimation of reasonable royalty rates for the assets and (2) the application of these royalty rates to a net revenue stream and discounting the resulting cash flows to determine a present value. The Company multiplied the selected royalty rate by the forecasted net revenue stream to calculate the cost savings (relief from royalty payment) associated with the asset. The cash flows are then discounted to present value using the selected discount rate and compared to the carrying value of the asset. In Fiscal 2017, Fiscal 2016 and Fiscal 2015, the Company tested the indefinite-lived intangible assets as required. As a result of this testing, in Fiscal 2016 and Fiscal 2015 the Company recorded a non-cash pretax trade name impairment charge to the Direct segment of approximately $173.0 million and $98.3 million, respectively, to the Intangible asset impairment line in the Consolidated Statements of Operations. During Fiscal 2017, the fair value exceeded the carrying value by 9.7%, and as such, no trade name impairment charges were recorded. Financial Instruments with Off-Balance-Sheet Risk The Company entered into the Current ABL Facility on November 16, 2017, which provides for maximum borrowings of $175.0 million for the Company, subject to a borrowing base. The Current ABL Facility has a letter of credit sub-limit of $70.0 million and will mature no later than November 16, 2022, subject to customary extension provisions provided for therein. The Current ABL Facility is available for working capital and other general corporate purposes, and was undrawn, other than for letters of credit. Also on November 16, 2017, the Company terminated all loan related documents of the Prior ABL Facility and repaid all outstanding amounts thereunder. See Note 3, Debt. Fair Value of Financial Instruments The Company determines the fair value of financial instruments in accordance with accounting standards pertaining to fair value measurements. Such standards define fair value and establish a framework for measuring fair value in accordance with GAAP. Under fair value measurement accounting standards, fair value is considered to be the exchange price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. The Company reports or discloses the fair value of financial assets and liabilities based on the fair value hierarchy prescribed by accounting standards for fair value measurements, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. Total accounts receivable were $49.9 million and $39.3 million as of February 2, 2018 and January 27, 2017, respectively. Bad debt expense was $0.2 million, $0.3 million and $0.3 million in Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. At February 2, 2018 and January 27, 2017 accounts receivable included $2.0 million and $3.7 million, respectively, due from Sears Holdings. Cash and cash equivalents, Accounts receivable, Accounts payable and Other current liabilities are reflected in the Consolidated Balance Sheets at cost, which approximates fair value due to the short-term nature of these instruments. Long-term debt, net is reflected in the Consolidated Balance Sheets at amortized cost. The fair value of debt was determined utilizing level 2 valuation techniques based on the closing inactive market bid price on February 2, 2018 and January 27, 2017. See Note 7, Fair Value of Financial Assets and Liabilities. Foreign Currency Translations and Transactions The Company translates the assets and liabilities of foreign subsidiaries from their respective functional currencies to United States dollars at the appropriate spot rates as of the balance sheet date. Revenue and expenses of operations are translated to United States dollars using weighted average exchange rates during the year. The foreign subsidiaries use the local currency as their functional currency. The effects of foreign currency translation adjustments are included as a component of Accumulated other comprehensive loss in the accompanying Consolidated Statements of Changes in Stockholders' Equity. The Company recognized a gain of $4.8 million in Fiscal 2017, an insignificant amount in Fiscal 2016 and a loss of $5.7 million in Fiscal 2015 in the accompanying Consolidated Statements of Operations. Revenue Recognition Revenues include sales of merchandise and delivery revenues related to merchandise sold. Revenue is recognized for the Direct segment when the merchandise is expected to be received by the customer and for the Retail segment at the time of sale in the store. Net revenues are reported net of estimated returns and allowances and exclude sales taxes. Estimated returns and allowances are recorded as a reduction of sales and cost of sales. The reserve for sales returns and allowances is calculated based on historical experience and future expectations and is included in Other current liabilities on the Consolidated Balance Sheets. Reserves for sales returns and allowances consisted of the following:
The Company sells gift certificates, gift cards and e-certificates (collectively, "gift cards") to customers through both the Direct and Retail segments. The gift cards do not have expiration dates. Revenue from gift cards are recognized when (i) the gift card is redeemed by the customer for merchandise, or (ii) after three years when the likelihood of the gift card being redeemed by the customer is remote ("gift card breakage") and the Company does not have a legal obligation to remit the value of the unredeemed gift cards to the relevant jurisdictions. Revenue recognized from gift card breakage was $1.6 million, $2.3 million and $2.2 million in Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. Cost of Sales Cost of sales are comprised principally of the costs of merchandise, in-bound freight, duty, warehousing and distribution (including receiving, picking, packing, store delivery and value added costs), customer shipping and handling costs and physical inventory losses. Depreciation and amortization is not included in the Company's Cost of sales. The Company participates in Sears Holdings' SYW program. The expenses for this program are recorded in Cost of sales, as described in Note 11, Related Party Agreements and Transactions. Selling and Administrative Expenses Selling and administrative expenses are comprised principally of payroll and benefits costs for direct, retail and corporate employees, marketing, occupancy costs of retail stores and corporate facilities, buying, pre-opening costs and other administrative expenses. All stock-based compensation is recorded in Selling and administrative expenses. See Note 5, Stock-Based Compensation. Selling and administrative expenses included $47.1 million, $52.9 million and $56.6 million in Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively, of costs allocated or charged to the Company by Sears Holdings. See Note 11, Related Party Agreements and Transactions. Restructuring Costs During Fiscal 2017, the Company implemented an initiative to right-size its New York Office in an effort to create efficiencies and refocus the Company back to its corporate headquarters in Dodgeville, Wisconsin. The restructuring included certain headcount reductions and the exit of a facility. The total restructuring charge expected as a result of this action is approximately $4.2 million, of which $3.9 million has been incurred as of February 2, 2018. The following table summarizes the activity of the Company's restructuring accrual:
Termination costs consist of involuntary employee termination benefits and severance pursuant to a nonrecurring benefit arrangement recognized as part of a restructuring initiative. Other costs consist of non-termination type costs, including lease termination costs and incremental costs to consolidate or close facilities and relocate employees. Product Recall In Fiscal 2017 there were no product recalls. In Fiscal 2016 and Fiscal 2015, $0.2 million and $3.4 million, respectively, was reversed due to customer return rates for products recalled in Fiscal 2014 being lower than estimated despite the efforts by the Company to contact impacted customers. These reversals were recorded in Other operating income (expense), net. Income Taxes Deferred income tax assets and liabilities are based on the estimated future tax effects of differences between the financial and tax basis of assets and liabilities based on currently enacted tax laws. The tax balances and income tax expense recognized are based on management's interpretation of the tax laws of multiple jurisdictions. Income tax expense also reflects best estimates and assumptions regarding, among other things, the level of future taxable income and tax planning. Future changes in tax laws, changes in projected levels of taxable income, tax planning and adoption and implementation of new accounting standards could impact the effective tax rate and tax balances recorded. Tax positions are recognized when they are more likely than not to be sustained upon examination. The amount recognized is measured as the largest amount of benefit that is more likely than not to be realized upon settlement. The Company is subject to periodic audits by the United States Internal Revenue Service and other state and local taxing authorities. These audits may challenge certain of the Company's tax positions such as the timing and amount of income and deductions and the allocation of taxable income to various tax jurisdictions. The Company evaluates its tax positions and establishes liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. These tax uncertainties are reviewed as facts and circumstances change and are adjusted accordingly. This requires significant management judgment in estimating final outcomes. Interest and penalties are classified as Income tax expense in the Consolidated Statements of Operations. See Note 9, Income Taxes, for further details. The Company performed an evaluation over its deferred tax assets and determined that a valuation allowance is considered necessary. See Note 9, Income Taxes, for further details on the valuation allowance. Excluding the $173.0 million and $98.3 million non-cash impairment charges to the indefinite-lived intangible asset in Fiscal 2016 and Fiscal 2015, respectively, the Company would not be in a cumulative loss position. Lands' End and Sears Holdings Corporation entered into the Tax Sharing Agreement in connection with the Separation which governs Sears Holdings Corporation's and Lands' End's respective rights, responsibilities and obligations after the Separation with respect to liabilities for United States federal, state, local and foreign taxes attributable to the Lands' End business. In addition to the allocation of tax liabilities, the Tax Sharing Agreement addresses the preparation and filing of tax returns for such taxes and dispute resolution with taxing authorities regarding such taxes. Generally, Sears Holdings Corporation is liable for all pre-Separation United States federal, state and local income taxes. Lands' End generally is liable for all other taxes attributable to its business, including all foreign income taxes. Self-Insurance The Company has a self-insured plan for health and welfare benefits and provides an accrual to cover the obligation. The accrual for the self-insured liability is based on claims filed and an estimate of claims incurred but not yet reported. The Company considers a number of factors, including historical claims information, when determining the amount of the accrual. Costs related to the administration of the plan and related claims are expensed as incurred. Total expenses were $16.5 million, $18.2 million and $16.2 million for Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. The Company also has a self-insured plan for certain costs related to workers' compensation. The Company obtains third-party insurance coverage to limit exposure to this self-insured risk. Postretirement Benefit Plan Effective January 1, 2006, the Company decided to indefinitely suspend eligibility to the postretirement medical plan for future company retirees. The Company has a 401(k) retirement plan, which covers most regular employees and allows them to make contributions. The Company also provides a matching contribution on a portion of the employee contributions. Total expense incurred under this plan was $3.2 million, $3.3 million and $3.3 million for Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. Other Comprehensive Income (Loss) Other comprehensive income (loss) encompasses all changes in equity other than those arising from transactions with stockholders, and is comprised solely of foreign currency translation adjustments, impact of the Tax Act on the translation adjustments and net income (loss).
As a result of the Tax Act, in Fiscal 2017, $2.4 million was reclassified out of Accumulated other comprehensive loss into Accumulated deficit in accordance with the adoption of ASU 2018-02, Income Statement - Reporting Comprehensive Income. See New Accounting Pronouncements for further discussion. No other amounts were reclassified out of Accumulated other comprehensive loss in the periods presented. Stock-Based Compensation Stock-based compensation expense for restricted stock units is determined based on the grant date fair value. The fair value is determined based on the Company's stock price on the date of the grant. The Company recognizes stock-based compensation cost net of estimated forfeitures and revises the estimates in subsequent periods if actual forfeitures differ from the estimates. The Company estimates the forfeiture rate based on historical data as well as expected future behavior. Stock-based compensation is recorded in Selling and administrative expense in the Consolidated Statements of Operations over the period in which the employee is required to provide service in exchange for the restricted stock units. Earnings per Share The numerator for both basic and diluted EPS is net income attributable to Lands' End. The denominator for basic EPS is based upon the number of weighted average shares of Lands' End common stock outstanding during the reporting periods. The denominator for diluted EPS is based upon the number of weighted average shares of Lands' End common stock and common stock equivalents outstanding during the reporting periods using the treasury stock method in accordance with ASC 718, Compensation - Stock Compensation. The following table summarizes the components of basic and diluted EPS:
Stock awards are considered anti-dilutive based on the application of the treasury stock method or in the event of a net loss. There were 397,669, 163,633 and 41,994 anti-dilutive shares excluded from the diluted weighted average shares outstanding in Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. New Accounting Pronouncements Intangibles - Goodwill and Other In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other, which simplifies the test for goodwill impairment by removing the second step of the goodwill impairment test. Under the new guidance, a one-step quantitative test is conducted. The excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit, is recorded as the amount of goodwill impairment. The new guidance does not amend the optional qualitative assessment of goodwill impairment. This guidance was adopted by the Company during Fourth Quarter 2017 and did not have a material impact on the Company. See Note 2, Summary of Significant Account Policies - Goodwill and Indefinite-lived Intangible Asset Impairment Assessments, and Note 8, Goodwill and Indefinite-Lived Intangible Asset, for additional details on the methodology used for the annual impairment testing. Income Statement - Reporting Comprehensive Income In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income, in response to the Tax Cuts and Jobs Act enacted on December 22, 2017 by the U.S. federal government. The standard eliminates the stranded tax effects resulting from the Tax Cuts and Jobs Act by reclassifying the effect out of Accumulated other comprehensive loss and into Accumulated deficit. This guidance was adopted by the Company during Fourth Quarter 2017 and resulted in a $2.4 million reclassification on the Consolidated Balance Sheets from Accumulated other comprehensive loss to Accumulated deficit in the period the standard was adopted. See Note 2, Summary of Significant Account Policies - Accumulated Other Comprehensive Income (Loss), and Note 9, Income Taxes, for additional details. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which provides guidance for revenue recognition. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today's guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. This guidance was deferred by ASU 2015-14, Revenue from Contracts with Customers, issued by the FASB in August 2015, and will be effective for Lands' End in the first quarter of its fiscal year ending February 1, 2019. Subsequently, the FASB has also issued accounting standards updates which clarify the guidance. The Company has evaluated its revenue streams to determine whether each revenue stream would be impacted by the provisions of the new guidance, including differences in timing, measurement or presentation. The Company plans to adopt the new guidance using the modified retrospective approach, where policies are implemented on a propsective basis, with the accumulated historical impact recorded as an adjustment to Accumulated deficit in the period of implementation. While most revenue recognition policies are not expected to change, the Company has identified anticipated changes to our Consolidated Statement of Operations related to the timing of revenue recognition for gift card breakage where estimated breakage revenue will now be recognized over the breakage period as opposed to at the end. See Revenue of Breakage for Certain Prepaid Stored-Value Products below for further details. The Company has also identified a presentational change within its Consolidated Balance Sheets, where the reserve for returns will now be presented gross in Inventories, net and Other accrued liabilities. The impact of this presentational change is an increase to both accounts which is expected to range between $5 million and $8 million based on the seasonality of the business. The new guidance will also require increased disclosures. Recognition of Breakage for Certain Prepaid Stored-Value Products In March 2016, the FASB issued ASU 2016-04, Recognition of Breakage for Certain Prepaid Stored-Value Products. This update clarifies when it is acceptable to recognize the unredeemed portion of prepaid gift cards into income. This guidance will be effective for Lands' End in the first quarter of its fiscal year ending February 1, 2019. The Company has evaluated the impacts of this ASU and has identified a change in the timing of recognition of revenues from gift cards. Upon implementation, the Company will recognize breakage income over the breakage period for the estimated portion of unredeemed gift cards that is unlikely to be redeemed where the Company does not have a legal obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property. Implementing this guidance will result in a cumulative impact to be recognized in Accumulated deficit at the date of adoption of approximately $1 million for estimated gift card breakage occurring prior to Fiscal 2018, under the modified retrospective approach described under the preceding Revenue from Contracts with Customers section. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. This update clarifies guidance to reduce the current diversity in practice of the classification of certain cash receipts and cash payments within the Consolidated Statement of Cash Flows. This guidance will be effective for Lands' End in the first quarter of its fiscal year ending February 1, 2019. The Company does not believe the adoption of this ASU will have a material impact on the Company's Consolidated Financial Statements. Restricted Cash In November 2016, the FASB issued ASU 2016-18, Restricted Cash. This ASU requires the inclusion of restricted cash within Cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the Consolidated Statement of Cash Flows. This guidance will be effective for the Company in the first quarter of its fiscal year ending February 1, 2019. The Company does not believe the adoption of this ASU will have a material impact on the Company's Consolidated Financial Statements. Leases In February 2016, the FASB issued ASU 2016-02, Leases, which will replace the existing guidance in ASC 840, Leases. This ASU requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee would recognize a straight-line total lease expense. This guidance will be effective for the Company in the first quarter of its fiscal year ending January 31, 2020. While it is expected that the standard will have a material increase in the assets and liabilities recorded on the Company's Consolidated Balance Sheet, the Company is still evaluating the overall impact on the Company's Consolidated Financial Statements. Reclassifications In Fourth Quarter 2017, the Company reassessed the segment allocation of royalty revenues related to a retail location. These revenues were not material and have been reclassified from the Corporate Segment to the Retail Segment for all periods presented. In First Quarter 2017, the Company adopted ASU 2016-09, Compensation - Stock Compensation, which changed the required presentation of payments of employee withholding taxes on share-based compensation on the Consolidated Statement of Cash Flows from an operating activity to a financing activity. As a result of the adoption, the Company reclassified payments of employee withholding taxes on share-based compensation from Other operating liabilities for Fiscal 2016 and Fiscal 2015 to Payments of employee withholding taxes on share-based compensation. Other requirements of this guidance did not have a material impact on the Company's Consolidated Financial Statements. |
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Debt | DEBT Debt Arrangements On November 16, 2017, the Company entered into the Current ABL Facility, which provides for maximum borrowings of $175.0 million for the Company, subject to a borrowing base. The Current ABL Facility has a letter of credit sub-limit of $70.0 million and will mature no later than November 16, 2022, subject to customary extension provisions provided for therein. The Current ABL Facility is available for working capital and other general corporate purposes, and was undrawn, other than for letters of credit. Upon entering into the Current ABL Facility, the Company incurred $1.5 million in debt origination fees. The fees were capitalized as debt issuance costs and are being amortized as an adjustment to Interest expense over the remaining life of the Debt Facilities. Also on November 16, 2017, the Company terminated all loan related documents of the Prior ABL Facility and repaid all outstanding amounts thereunder. The Prior ABL Facility provided for maximum borrowings of $175.0 million for Lands' End, subject to a borrowing base, with a $30.0 million sub facility for the UK Borrower. The Prior ABL Facility had a sub-limit of $70.0 million for domestic letters of credit and a sub-limit of $15.0 million for letters of credit for the UK Borrower. The Prior ABL Facility was available for working capital and other general corporate purposes, and was undrawn, other than for letters of credit. On April 4, 2014, Lands' End entered into the Term Loan Facility of $515.0 million, the proceeds of which were used to pay a dividend of $500.0 million to a subsidiary of Sears Holdings Corporation immediately prior to the Separation and to pay fees and expenses associated with the Prior ABL Facility and the Term Loan Facility of approximately $11.4 million, with the remaining proceeds used for general corporate purposes. The fees were capitalized as debt issuance costs and are being amortized as an adjustment to Interest expense over the remaining life of the Debt Facilities. The Company's debt consisted of the following:
(1) Debt facility terminated on November 16, 2017. The following table summarizes the Company's borrowing availability under the ABL Facilities:
Interest; Fees The interest rates per annum applicable to the loans under the Debt Facilities are based on a fluctuating rate of interest measured by reference to, at the borrowers' election, either (i) an adjusted LIBOR plus a borrowing margin, or (ii) an alternative base rate plus a borrowing margin. The borrowing margin is fixed for the Term Loan Facility at 3.25% in the case of LIBOR loans and 2.25% in the case of base rate loans. For the Term Loan Facility, LIBOR is subject to a 1% interest rate floor. The borrowing margin for the ABL Facilities is subject to adjustment based on the average excess availability under the ABL Facilities for the preceding fiscal quarter. LIBOR borrowings will range from 1.25% to 1.75% and 1.50% to 2.00% for the Current ABL Facility and Prior ABL Facility, respectively. Base rate borrowings will range from 0.50% to 1.00% for the ABL Facilities. Customary agency fees are payable in respect of the Debt Facilities. The ABL Facilities fees also include (i) commitment fees in an amount equal to 0.25% and 0.25% to 0.375% of the daily unused portions of the Current ABL Facility and Prior ABL Facility respectively, and (ii) customary letter of credit fees. Amortization and Prepayments The Term Loan Facility amortizes at a rate equal to 1% per annum, and is subject to mandatory prepayment in an amount equal to a percentage of the borrower's excess cash flows (as defined in the Term Loan Facility) in each fiscal year, ranging from 0% to 50% depending on Lands' End's secured leverage ratio, and the proceeds from certain asset sales and casualty events. Based on Fiscal 2017 results, mandatory prepayments were triggered, however, excess cash flows were negative resulting in no prepayments to be made. The Company's aggregate scheduled maturities of the Term Loan Facility as of February 2, 2018 are as follows:
Guarantees; Security All domestic obligations under the Debt Facilities are unconditionally guaranteed by the Company and, subject to certain exceptions, each of its existing and future direct and indirect wholly-owned domestic subsidiaries. The Current ABL Facility is secured by a first priority security interest in certain working capital of the borrowers and guarantors consisting primarily of accounts receivable and inventory. The Term Loan Facility is secured by a second priority security interest in the same collateral, with certain exceptions. The Term Loan Facility also is secured by a first priority security interest in certain property and assets of the borrowers and guarantors, including certain fixed assets and stock of subsidiaries. The Current ABL Facility is secured by a second priority security interest in the same collateral. The Prior ABL Facility had the same terms to those stated above. In addition, the obligations of the UK Borrower under the Prior ABL Facility were guaranteed by its existing and future direct and indirect subsidiaries organized in the United Kingdom. Representations and Warranties; Covenants Subject to specified exceptions, the Debt Facilities contain various representations and warranties and restrictive covenants that, among other things, restrict the ability of Lands' End and its subsidiaries to incur indebtedness (including guarantees), grant liens, make investments, make dividends or distributions with respect to capital stock, make prepayments on other indebtedness, engage in mergers or change the nature of their business. In addition, if excess availability under the Current ABL Facility falls below the greater of 10% of the loan cap amount or $15.0 million, Lands' End will be required to comply with a minimum fixed charge coverage ratio of 1.0 to 1.0. The Debt Facilities do not otherwise contain financial maintenance covenants. The Company was in compliance with all financial covenants related to the Debt Facilities as of February 2, 2018. The Debt Facilities contain certain affirmative covenants, including reporting requirements such as delivery of financial statements, certificates and notices of certain events, maintaining insurance, and providing additional guarantees and collateral in certain circumstances. Events of Default The Debt Facilities include customary events of default including non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations or warranties, cross defaults related to certain other material indebtedness, bankruptcy and insolvency events, invalidity or impairment of guarantees or security interests, and material judgments and change of control. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASES The Company leases stores, office space and warehouses under various leasing arrangements. As of February 2, 2018, the Retail segment leases store space in 174 Sears Holdings store locations (see Note 11, Related Party Agreements and Transactions) and 12 Lands' End Stores. The Direct segment leases one Lands' End school uniform store. The total number of stores, 189, includes two Lands' End stores that are owned by the Company which have no required minimum lease payments. All leases are accounted for as operating leases. Operating lease obligations are based upon contractual minimum rents. Certain leases include renewal options. Total rental expense under operating leases was $27.2 million, $30.6 million and $31.1 million for Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. Total future commitments under these operating leases (primarily leased Lands' End Shops at Sears space at Sears Holdings locations as described in Note 11, Related Party Agreements and Transactions) as of February 2, 2018 are as follows for the fiscal years ending (in thousands):
(1) Minimum payments have not been reduced by minimum sublease rentals of $4.4 million due in the future under noncancelable subleases. The following table summarizes the fiscal years in which the remaining Lands' End Shops at Sears stores are currently contracted to expire during:
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Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | STOCK-BASED COMPENSATION The Company expenses the fair value of all stock awards over their respective vesting periods, ensuring that, the amount of cumulative compensation cost recognized at any date is at least equal to the portion of the grant-date value of the award that is vested at that date. The Company has elected to adjust compensation expense for an estimated forfeiture rate for those shares not expected to vest and to recognize compensation cost on a straight-line basis for awards that only have a service requirement with multiple vest dates. The Company has granted the following types of stock awards to employees at management levels and above:
The following table summarizes the Company's stock-based compensation expense, which is included in Selling and administrative expense in the Consolidated Statements of Operations:
The following table provides a summary of the activities for stock awards for Fiscal 2017:
The following table provides a summary of the activities for stock awards for Fiscal 2016:
Total unrecognized stock-based compensation expense related to unvested Deferred Awards was approximately $7.3 million as of February 2, 2018, which is expected to be recognized ratably over a weighted average period of 2.3 years. Deferred Awards granted to various employees during Fiscal 2017 generally vest ratably for a period between fifteen months to four years. There was no unrecognized stock-based compensation expense related to unvested Performance Awards as of February 2, 2018. Total unrecognized stock-based compensation expense related to unvested Option Awards was approximately $2.3 million as of February 2, 2018, which is expected to be recognized ratably over a weighted average period of 3.1 years. The Option Awards vest ratably over 4.0 years and the contract to buy Option Awards extends for another 6.0 years. The fair value of each Option Award was estimated on the grant date using the Black-Scholes option pricing model. No Option Awards were exercisable as of February 2, 2018. The fair value of Option Awards is determined on the grant date utilizing a Black-Scholes option pricing model. The following assumptions were utilized in deriving the fair value for Option Awards granted during Fiscal 2017:
The simplified method was used to calculate the Expected life (in years) to be utilized in the Black-Scholes option pricing model applied to Option Awards granted in Fiscal 2017. The simplified method was used as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term of the Option Awards due to the limited period of time since the Company began publicly issuing shares. |
Other Current Liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities | OTHER CURRENT LIABILITIES Other current liabilities consisted of the following:
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Fair Value of Financial Assets and Liabilities |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Assets and Liabilities | FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES The Company determines fair value of financial assets and liabilities based on the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 inputs—unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. An active market for the asset or liability is one in which transactions for the asset or liability occurs with sufficient frequency and volume to provide ongoing pricing information. Level 2 inputs—inputs other than quoted market prices included in Level 1 that are observable, either directly or indirectly, for the asset or liability. Level 2 inputs include, but are not limited to, quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted market prices that are observable for the asset or liability, such as interest rate curves and yield curves observable at commonly quoted intervals, volatilities, credit risk and default rates. Level 3 inputs—unobservable inputs for the asset or liability. Restricted cash is reflected on the Consolidated Balance Sheets at fair value. The fair value of Restricted cash as of February 2, 2018 and January 27, 2017 was $2.4 million and $3.3 million, respectively, based on Level 1 inputs. Restricted cash amounts are valued based upon statements received from financial institutions. Carrying values and fair values of other financial instruments in the Consolidated Balance Sheets are as follows:
Long-term debt, including short-term portion was valued utilizing level 2 valuation techniques based on the closing inactive market bid price on February 2, 2018. There were no nonfinancial assets or nonfinancial liabilities recognized at fair value on a nonrecurring basis as of February 2, 2018 and January 27, 2017. Goodwill and indefinite-lived intangible assets are also tested annually or if a triggering event occurs that indicates an impairment loss may have incurred using fair value measurements with unobservable inputs (Level 3). See Note 2, Summary of Significant Accounting Policies-Goodwill and Intangible Asset Impairment Assessments, and Note 8, Goodwill Indefinite-Lived and Intangible Assets, for further details. |
Goodwill and Indefinite-Lived Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Indefinite-Lived Intangible Assets | GOODWILL AND INDEFINITE-LIVED INTANGIBLE ASSET The Company's intangible assets, consisting of a trade name and goodwill, were originally valued in connection with a business combination accounted for under the purchase accounting method. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. The net carrying amounts of goodwill and trade name are included within the Company's Direct segment. The following table summarizes the Company's indefinite-lived intangible asset and Goodwill:
ASC 350, Intangibles - Goodwill and Other, requires companies to test goodwill and indefinite-lived intangible assets for impairment annually, or more often if an event or circumstance indicates that the carrying amount may not be recoverable. During Fiscal 2017, Fiscal 2016 and Fiscal 2015 the Company conducted annual impairment testing of its goodwill and indefinite-lived intangible asset. Due to revenue declines in the respective periods, the Company recorded non-cash pretax indefinite-lived intangible asset impairment charges of $173.0 million and $98.3 million to its Direct segment during Fiscal 2016 and Fiscal 2015, respectively. There was no impairment charge recorded for the intangible asset in Fiscal 2017. The impairments were recorded in Intangible asset impairment on the Consolidated Statements of Operations. There were no impairments of goodwill during any periods presented or since goodwill was first recognized. See also Note 2, Summary of Significant Accounting Policies-Goodwill and Intangible Asset Impairment Assessments, for further details. If actual results fall short of the Company's estimates and assumptions used in estimating revenue growth, future cash flows and asset fair values, the Company could incur further impairment charges for the intangible asset or goodwill, which could have an adverse effect on its results of operations. |
Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES The Company's income (loss) before income taxes in the United States and in foreign jurisdictions is as follows:
The components of the (benefit from) provision for income taxes are as follows:
A reconciliation of the statutory federal income tax rate to the effective income tax rate is as follows:
Under Internal Revenue Code Section 15(a), companies are required to calculate their federal tax rate by using a blended rate based on the date of enactment of the Tax Act ("Federal Blended Rate"). The Federal Blended Rate for the Company is 33.8% for Fiscal 2017. Deferred tax assets and liabilities consisted of the following:
As of February 2, 2018, the Company's foreign subsidiaries had $8.6 million of foreign net operating loss ("NOL") carryforwards (generating a $2.3 million deferred tax asset) available to offset future taxable income. These foreign NOLs can be carried forward indefinitely, however, a valuation allowance was established since the future utilization of these NOLs is uncertain. A reconciliation of the beginning and ending amount of UTBs is as follows:
As of February 2, 2018, the Company had UTBs of $4.5 million. Of this amount, $3.0 million would, if recognized, impact its effective tax rate. It is reasonable that UTBs will fluctuate over the next 12 months for audit settlements and expirations of statute of limitations for certain jurisdictions by no more than $2.5 million. Pursuant to the Tax Sharing Agreement, Sears Holdings Corporation is generally responsible for all United States federal, state and local UTBs through the date of the Separation and, as such, the UTBs are recorded in Other liabilities in the Consolidated Balance Sheets, and an indemnification asset from Sears Holdings Corporation for the $4.2 million pre-Separation UTBs is recorded in Other assets in the Consolidated Balance Sheets. Prior to the Separation, the tax provision and related tax accounts represented the tax attributable to the Company as if the Company filed a separate tax return. However, the computed obligations were settled through Sears Holdings Corporation. The Company classifies interest expense and penalties related to UTBs and interest income on tax overpayments as components of income tax expense. As of February 2, 2018, the total amount of interest expense and penalties recognized on the balance sheet was $3.2 million ($2.1 million net of federal benefit). As of January 27, 2017, the total amount of interest and penalties recognized on the balance sheet was $4.9 million ($3.2 million net of federal benefit). The total amount of net interest expense recognized in the Consolidated Statements of Operations were insignificant for all periods presented. Sears Holdings and Lands' End files income tax returns in both the United States and various foreign jurisdictions. The Internal Revenue Service has completed its examination of all federal income tax returns of Sears Holdings through the 2009 return, and all matters arising from such examinations have been resolved. The Company is open to examination by the Internal Revenue Service for the years 2015 and forward. Sears Holdings and the Company are under examination by various state income tax jurisdictions for the years 2011 to 2014. Impacts of Separation At Separation from Sears, the Company entered into a Tax Sharing Agreement with respect to Federal and State Income tax liabilities concerning pre-separation periods. Pursuant to the tax sharing agreement, a $13.7 million receivable was recorded by the Company to reflect the indemnification by Sears Holdings Corporation of the pre-Separation uncertain tax positions (including penalties and interest) for which Sears Holdings is responsible. This receivable is included in Other assets in the Consolidated Balance Sheets and was $7.4 million and $11.4 million at February 2, 2018 and January 27, 2017, respectively. Impacts of the Tax Act On December 22, 2017, the Tax Cuts and Jobs Act (H.R. 1) ("Tax Act") was signed into law. The Tax Act contains significant changes to corporate taxation, including (i) the reduction of the corporate income tax rate to 21%, (ii) the acceleration of expensing for certain business assets, (iii) the nonrecurring transition tax related to the transition of U.S. international tax from a worldwide tax system to a territorial tax system, (iv) the repeal of the domestic production deduction, (v) additional limitations on the deductibility of interest expense, and (vi) expanded limitations on the deductibility of executive compensation. The key impacts of the Tax Act on the Company's Consolidated Financial Statements for Fiscal 2017, were the re-measurement of deferred tax balances to the new corporate tax rate and the accrual for the nonrecurring transition tax liability. While the Company has not yet finalized its assessment of the effects of the Tax Act, the Company is able to determine reasonable estimates for the impacts of the key items specified above, thus the Company reported provisional amounts for these items. In accordance with Staff Accounting Bulletin No. 118 ("SAB 118"), the Company is providing additional disclosures related to these provisional amounts. In order to calculate the effects of the new corporate tax rate on the deferred tax balances, ASC 740, Income Taxes, ("ASC 740") required the re-measurement of the deferred tax balances as of the enactment date of the Tax Act, based on the rates at which the balances were expected to reverse in the future. The Company is still analyzing the impact of the retroactive provisions of the law on its deferred tax balances and refining its calculations which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount determined, and recorded, for the re-measurement of the deferred tax balances resulted in a net reduction in deferred tax liabilities of $29.7 million. The Company will continue to analyze the impacts of the law on the deferred taxes and will refine the estimate of the balances as of the remeasurement date within 12 months from the date of enactment. Additionally, the Company determined the provisional amount for the nonrecurring transition tax. The nonrecurring transition tax is based on the total post-1986 foreign earnings and profits ("E&P") that were previously deferred from U.S. income tax. The applicable tax rate is based on the amount of those post-1986 earnings that is held in cash and other specified assets ("Cash Position"). While the Company has not yet finalized its calculation of the total post-1986 E&P and Cash Position for foreign corporations or the impact of foreign tax credits, the Company has (i) prepared reasonable estimates of the total post-1986 E&P and Cash Position of foreign corporations, (ii) determined the applicable tax rates using the estimated Cash Position amounts, and, (iii) calculated, and recorded, a provisional amount for the nonrecurring transition tax liability of $4.3 million. This amount is payable over eight years. Of the $4.3 million transition tax liability, $0.4 million is payable in the next 12 months and is recorded in current liabilities. The balance of $3.9 million is recorded in non-current liabilities. This amount is subject to change upon the completion of the total post-1986 E&P calculation, Cash Position calculation, and foreign tax credit determination. The Company will continue to apply its existing accounting under ASC 740 for this matter. The Company recorded a $30.6 million benefit which consisted of the provisional amounts for the re-measurement of deferred tax balances at the new expected tax rates under the Tax Act. This includes a net reduction of deferred liabilities of $29.7 million plus a $5.2 million reduction to deferred liabilities on unremitted foreign earnings previously recorded. Both amounts are offset by the provisional amount for a nonrecurring transition tax liability of $4.3 million related to foreign investments under the Tax Act. The aforementioned provisional amounts related to the deferred tax balances and nonrecurring transition tax are based on information available at this time and may change due to a variety of factors, including, among others, (i) anticipated guidance from the U.S. Department of Treasury about implementing the Tax Act, (ii) potential additional guidance from the Securities and Exchange Commission or the Financial Accounting Standards Board related to the Tax Act, (iii) any impact resulting from the Company's Fiscal 2018 financial closing and reporting processes, and (iv) management's further assessment of the Tax Act and related regulatory guidance. The Company has not finalized its full assessment of the impact of the Tax Act on the business and Consolidated Financial Statements. While the effective date of most of the provisions of the Tax Act do not apply until Fiscal 2018, the Company will continue its assessment of the impact of the Tax Act on the business and Consolidated Financial Statements throughout the one-year measurement period as provided by SAB 118. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company is party to various claims, legal proceedings and investigations arising in the ordinary course of business. Some of these actions involve complex factual and legal issues and are subject to uncertainties. At this time, the Company is not able to either predict the outcome of these legal proceedings or reasonably estimate a potential range of loss with respect to the proceedings. While it is not feasible to predict the outcome of such pending claims, proceedings and investigations with certainty, management is of the opinion that their ultimate resolution should not have a material adverse effect on results of operations, cash flows or financial position taken as a whole. Beginning in 2005, the Company initiated claims in Iowa County Circuit Court against the City of Dodgeville (the "City") to recover overpaid taxes resulting from the City's excessive property tax assessment of the Company's headquarters campus for each tax year from 2005 through 2016. As of February 2, 2018, the City had refunded, as the result of various court decisions, over $7.5 million in excessive taxes and interest to the Company. All excessive property tax assessments claims arising with respect to the tax years 2005 through 2016 are now closed. The Company recognized refunds of approximately $1.0 million, $2.4 million and $0.9 million of the above amount in Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. The refunds were recorded primarily within Selling and administrative costs in the Consolidated Statement of Operations. |
Related Party Agreements and Transactions |
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Related Party Agreements and Transactions | RELATED PARTY AGREEMENTS AND TRANSACTIONS According to statements on form Schedule 13D filed with the SEC by ESL, ESL beneficially owns significant portions of both the Company's and Sears Holdings Corporation's outstanding shares of common stock. Therefore Sears Holdings Corporation, the Company's former parent company, is considered a related party. In Fiscal 2017, ESL purchased approximately $4.0 million of the Company's outstanding debt at a discount of approximately $1.0 million. Due to the related party relationship, this discount was considered a cancellation of debt under Section 108 of the Internal Revenue Code, triggering additional income tax payments due in the current period for the Company. As of May 4, 2017, ESL had divested itself of all of the Company's outstanding debt to an unrelated third party. In connection with, and subsequent to, the Separation, the Company entered into various agreements with Sears Holdings which, among other things, (i) govern specified aspects of the Company's relationship following the Separation, especially with regards to the Lands' End Shops at Sears, and (ii) establish terms pursuant to which subsidiaries of Sears Holdings Corporation are providing services to the Company. References to and descriptions of the agreements below represent certain agreements entered into in connection with, and subsequent to, the Separation, where applicable. The components of the transactions between the Company and Sears Holdings, which exclude pass-through payments to third parties, are as follows: Lands' End Shops at Sears Related party costs charged by Sears Holdings to the Company related to Lands' End Shops at Sears are as follows:
(1) During Fiscal 2017, Fiscal 2016 and Fiscal 2015, 42, 11 and 9 Lands' End Shops at Sears were closed, respectively. Retail Services, Store Labor The Company contracts with Sears Roebuck to provide hourly labor and required systems and tools to service customers in the Lands' End Shops at Sears. This includes dedicated staff to directly engage with customers and allocated overhead. The dedicated staff undergoes specific Lands' End brand training. Required tools include point-of-sale, price lookup and labor scheduling systems. Rent, CAM and Occupancy Costs The Company rents space in store locations owned or leased by Sears Roebuck. The agreements include a cost per square foot for rent, CAM and occupancy costs. The lease terms for the individual store locations generally terminate effective January 31, 2019, or 2020. Financial Services and Payment Processing The Company contracts with SHMC to provide retail financing and payment solutions, primarily based upon customer credit card activity, including third-party payment acceptance, credit cards and gift cards. Supply Chain Costs The Company contracts with Sears Roebuck to provide logistics, handling, transportation and other services, primarily based upon inventory units processed, to assist in the flow of merchandise from vendors to the Lands' End Shops at Sears locations. General Corporate Services Related party costs charged by Sears Holdings to the Company for general corporate services are as follows:
Sourcing The Company contracts with a subsidiary of Sears Holdings to provide agreed upon buying agency services, on a non-exclusive basis, in foreign territories from where the Company purchases merchandise. These services, primarily based upon quantities purchased, include quality-control functions, regulatory compliance, product claims management and new vendor selection and setup assistance. During Second Quarter 2016 the Company entered into a new buying agency services agreement with a subsidiary of Sears Holding and terminated the agreement that was entered into at the time of the Separation. The new agreement provided for a higher commission rate and a higher annual commission minimum, as well as enhanced sourcing services, including for product development, costing analyses, vendor communications, vendor strategy and quality assurance. During Third Quarter 2017, the Company extended the contract under which it receives sourcing services through June 30, 2020 and amended the contract to contain lower commission rates while retaining the same level of services to be provided. These amounts are capitalized into inventory and are expensed through cost of goods sold over the course of inventory turns and included in Cost of sales in the Consolidated Statements of Operations. Shop Your Way The Company contracts with SHMC to participate in Sears Holdings' SYW program. Customers earn points issued by SHMC on purchases which may be redeemed to pay for future purchases. The Company pays SHMC an agreed-upon fee for points issued in connection with purchases from the Company. Depending on the ratio of points redeemed in Lands' End formats to points issued in Lands' End formats in the previous 12 months, the Company generally either pays additional fees or is reimbursed fees by SHMC. All SYW program expenses are recorded in Cost of sales in the Consolidated Statements of Operations. During the Third Quarter 2017, the Company extended the contract governing its participation in the Shop Your Way program through April 4, 2018. Shared Services The Company contracts with SHMC to provide certain shared corporate services. These shared services include compliance. Use of Intellectual Property or Services Related party revenue charged by the Company to Sears Holdings for the use of intellectual property or services is as follows:
Call Center Services The Company has entered into a contract with SHMC to provide call center services in support of Sears Holdings' SYW program. The income is included in Net revenue and costs are included in Selling and administrative expenses in the Consolidated Statements of Operations. The contract for call center services expired on April 30, 2017. Lands' End Business Outfitters Revenue The Company sells store uniforms and other company apparel to Sears Holdings from time to time. Revenue related to these sales is included in Net revenue in the Consolidated Statements of Operations. Credit Card Revenue The Company has entered into a contract with SHMC to provide credit cards for customer sales transactions. The Company earns revenue based on the dollar volume of revenue and receives a fee based on the generation of new credit card accounts. This income is included in Net revenue in the Consolidated Statements of Operations. Royalty Income The Company entered into a licensing agreement with SHMC whereby royalties are paid in consideration for sharing or use of intellectual property. Royalties received under this agreement are included in Net revenue in the Consolidated Statements of Operations. Gift Card Revenue (Expense) The Company has entered into a contract with SHCP to provide gift cards for use by the Company. The Company offers gift cards for sale on behalf of SHCP and redeems such items on the Company's internet websites, retail stores and other retail outlets for merchandise. The Company receives a commission fee on the face value for each gift card it sells, and a payment from Sears Holdings for certain Lands' End-branded gift cards that are redeemed by Sears Holdings for non-Lands' End merchandise. The Company pays a transaction/redemption fee to SHCP for each gift card the Company redeems. The income, net of associated expenses, is included in Net revenue in the Consolidated Statements of Operations. Additional Related Party Balance Sheet Information At February 2, 2018 and January 27, 2017, the Company included $2.0 million and $3.7 million in Accounts Receivable, net, respectively, and $2.9 million and $3.1 million in Accounts payable, respectively, in the Consolidated Balance Sheets to reflect amounts due from and owed to Sears Holdings. At February 2, 2018 and January 27, 2017, a $7.4 million and $11.4 million receivable, respectively, was recorded by the Company in Other assets in the Consolidated Balance Sheets to reflect the indemnification by Sears Holdings Corporation of the pre-Separation uncertain tax positions (including penalties and interest) for which Sears Holdings Corporation is responsible. |
Segment Reporting |
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Segment Reporting | SEGMENT REPORTING The Company is a leading multi-channel retailer of casual clothing, accessories and footwear, as well as home products, and has two reportable segments: Direct and Retail. Product revenue is divided by product categories: Apparel and Non-apparel. The Non-apparel revenue includes accessories, footwear, and home goods. Services and other revenue includes embroidery, monogramming, gift wrapping, shipping and other services. Net revenue is aggregated by product category in the following table:
The Company identifies reportable segments according to how business activities are managed and evaluated. The Company's reportable segments are strategic business units that offer similar products and services but are sold either directly from its warehouses (Direct) or through its retail stores (Retail). Adjusted EBITDA is the primary measure used to make decisions on allocating resources and assessing performance of each reportable segment. Adjusted EBITDA is computed as Income before taxes appearing on the Consolidated Statements of Operations net of interest expense, depreciation and amortization and other significant items that while periodically affecting the Company's results, may vary significantly from period to period and may have a disproportionate effect in a given period, which may affect comparability of results. Reportable segment assets are those directly used in or clearly allocable to a reportable segment's operations. Depreciation, amortization, and property and equipment expenditures are recognized in each respective segment. There were no material transactions between reporting segments for the years ended February 2, 2018, January 27, 2017 and January 29, 2016.
Financial information by segment is presented as follows:
The geographical allocation of Net revenue is based upon country of order fulfillment. Other foreign amounts represent orders fulfilled from the United States and shipped to customers in another country. The following presents summarized geographical information:
Other than the United States, no one country is greater than 10% of total Net revenue or of total Property and equipment, net. |
Quarterly Financial Data (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data (Unaudited) | QUARTERLY FINANCIAL DATA (UNAUDITED)
(1) The sum of the quarterly earnings per share—basic and diluted amounts may not equal the fiscal year amount due to rounding. (2) Fourth Quarter 2016 Net loss includes an impairment charge of $173.0 million related to the non-cash write-down of our trade name indefinite-lived asset, Lands' End. (3) Fourth Quarter 2017 Net income includes the impacts of the Tax Act reform. See Note 9, Income Taxes, for additional details. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | 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 are of a normal and recurring nature necessary for a fair presentation of the results for the periods presented have been reflected. Dollar amounts are reported in thousands, except per share data, unless otherwise noted. |
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Fiscal Period, Policy | Fiscal Year The Company's fiscal year end is on the Friday preceding the Saturday closest to January 31 each year. The fiscal periods in this report are presented as follows, unless the context otherwise requires:
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Accounting Policy - Seasonality | Seasonality The Company's operations have historically been seasonal, with a disproportionate amount of net revenue occurring in the fourth fiscal quarter, reflecting increased demand during the year-end holiday selling season. The impact of seasonality on results of operations is more pronounced since the level of certain fixed costs, such as occupancy and overhead expenses, do not vary with sales. The Company's results of operations also may fluctuate based upon such factors as the timing of certain holiday seasons and promotions, the amount of net revenue contributed by new and existing stores, the timing and level of markdowns, competitive factors, weather and general economic conditions. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reportable amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
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Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of highly liquid temporary instruments purchased with original maturities of three months or less and includes deposits in-transit from banks for payments related to third-party credit card and debit card transactions within cash. |
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Restricted cash | Restricted cash The Company classifies cash balances pledged as collateral as Restricted cash on the Consolidated Balance Sheets. |
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Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company provides an allowance for doubtful accounts based on both historical experience and specific identification. Allowances for doubtful accounts on accounts receivable balances were $0.6 million as of February 2, 2018 and January 27, 2017. Accounts receivable balance is presented net of the Company's allowance for doubtful accounts and is comprised of various customer-related accounts receivable. Changes in the balance of the allowance for doubtful accounts are as follows:
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Inventory | Inventory Inventories primarily consist of merchandise purchased for resale. For financial reporting and tax purposes, the Company's United States inventory, primarily merchandise held for sale, is stated at last-in, first-out ("LIFO") cost, which is lower than market. The Company accounts for its non-United States inventory on the first-in, first-out ("FIFO") method. The United States inventory accounted for using the LIFO method was 88% and 90% of total inventory as of February 2, 2018 and January 27, 2017, respectively. If the FIFO method of accounting for inventory had been used, the effect on inventory would have been $1.0 million and $0.3 million as of February 2, 2018 and January 27, 2017, respectively. The Company maintains a reserve for excess and obsolete inventory. The reserve is calculated based on historical experience related to liquidation/disposal of identified inventory. The excess and obsolescence reserve balances were $12.1 million and $20.1 million as of February 2, 2018 and January 27, 2017, respectively. In Fiscal 2016, the Company sold approximately $3.8 million of inventory in exchange for marketing trade credits. This was recorded as a non-monetary transaction and the trade credits receivable was recorded at the value of the inventory exchanged. The Company had approximately $0.9 million and $1.0 million of trade credits receivable recorded in Accounts receivable, net as of both February 2, 2018 and January 27, 2017, respectively, and an additional $3.5 million and $3.6 million of trade credits receivable recorded in Other assets as of February 2, 2018 and January 27, 2017, respectively, based on the time period in which the credits are expected to be used. Trade credit receivable balances include credits recorded in prior years. |
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Deferred Catalog Costs and Marketing | Deferred Catalog Costs and Marketing Costs incurred for direct response marketing consist primarily of catalog production and mailing costs that are generally amortized within two months from the date catalogs are mailed. Unamortized marketing costs reported as prepaid assets were $13.7 million and $12.7 million as of February 2, 2018 and January 27, 2017, respectively. The Company expenses the costs of marketing for website, magazine, newspaper, radio and other general media when the marketing takes place. Marketing expenses, including catalog costs amortization, website-related costs and other print media were $186.4 million, $193.2 million and $199.0 million for Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. These costs are included within Selling and administrative expenses in the accompanying Consolidated Statements of Operations. |
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Property and Equipment | Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. Additions and substantial improvements are capitalized and include expenditures that materially extend the useful lives of existing facilities and equipment. Maintenance and repairs that do not materially improve or extend the lives of the respective assets are expensed as incurred. As of the balance sheet dates, Property and equipment, net consisted of the following:
As of February 2, 2018 and January 27, 2017, assets in development relate primarily to technological investments in the ERP system. Assets placed in service related to the ERP system as of February 2, 2018 were $35.5 million. Depreciation expense is recorded over the estimated useful lives of the respective assets using the straight-line method. Leasehold improvements are depreciated over the shorter of the associated lease term or the estimated useful life of the asset. Depreciation expense was $24.9 million, $19.0 million and $17.4 million for Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively |
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Impairment of Long-Lived Assets and Finite-Lived Intangible Assets | Impairment of Property and Equipment Property and equipment are subject to a review for impairment if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the sum of the expected future undiscounted cash flows generated by an asset or asset group is less than its carrying amount, the Company then determines the fair value of the asset generally by using a discounted cash flow model. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value as determined based on quoted market prices or through the use of other valuation techniques. There were no impairments of property and equipment recognized in Fiscal 2017, Fiscal 2016 or Fiscal 2015. |
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Goodwill and Intangible Asset Impairment Assessments | Goodwill and Indefinite-lived Intangible Asset Impairment Assessments Goodwill and the indefinite-lived trade name intangible asset are tested separately for impairment on an annual basis, or are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company's goodwill and trade name intangible asset were originally valued in connection with Kmart Holding Corporation's acquisition of Sears Roebuck in March 2005. The Company's impairment evaluation contains multiple uncertainties because it requires management to make assumptions and to apply judgment to estimate future cash flows and asset fair values, including forecasting cash flows under different scenarios. Lands' End performs annual goodwill and indefinite-lived intangible asset impairment tests on the last day of the Company's November accounting period each year and updates the tests between annual tests if events or circumstances occur that would more likely than not reduce the fair value of a reporting unit or indefinite-lived intangible asset below its carrying amount. However, if actual results fall short of the Company's estimates and assumptions used in estimating future cash flows and asset fair values, the Company may be exposed to losses that could be material. Goodwill impairment assessments. Our goodwill resides in the Direct reporting unit. The Company tests goodwill for impairment using a one-step quantitative test. The quantitative test compares the reporting unit's fair value to its carrying value. An impairment is recorded for any excess carrying value above the reporting unit's fair value, not to exceed the amount of goodwill. The Company estimates fair value using a discounted cash flow model, commonly referred to as the income approach. The income approach uses a reporting unit's projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital that reflects current market conditions appropriate to the Company's reporting unit. The projection uses management's best estimates of economic and market conditions over the projected period using the best information available, including growth rates in revenues, costs, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. This approach is consistent with the annual impairment evaluation for Fiscal 2016. The Company adjusted the valuation methodology in Fiscal 2016 to only rely on the discounted cash flow valuation due to the lack of comparable market participants in both Fiscal 2017 and Fiscal 2016. In Fiscal 2015, a market approach was also used, and the Company's final estimate of the fair value of the reporting unit was developed by weighting the fair values determined through both the market participant and income approaches. The market approach determines a value of the reporting unit by deriving market multiples for the reporting unit based on assumptions potential market participants would use in establishing a bid price for the reporting unit, however, this method is dependent on the availability of comparable market participant information. If the carrying value of the reporting unit is higher than its fair value, there is an indication that impairment may exist. During Fiscal 2017, Fiscal 2016 and Fiscal 2015, the fair value of the reporting unit exceeded the carrying value by 22.9%, 17.1% and 23.8%, respectively, and as such, the Company did not record any goodwill impairment charges. Indefinite-lived intangible asset impairment assessments. The Company's indefinite-lived intangible asset, the Lands' End trade name, resides in the Direct reporting unit. Lands' End reviews the trade name for impairment by comparing the carrying amount to its fair value. The Company considers the income approach when testing the indefinite-lived intangible asset for impairment on an annual basis. Lands' End determined that the income approach, specifically the relief from royalty method, was most appropriate for analyzing the Company's indefinite-lived asset. This method is based on the assumption that, in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset class. The relief from royalty method involves two steps: (1) estimation of reasonable royalty rates for the assets and (2) the application of these royalty rates to a net revenue stream and discounting the resulting cash flows to determine a present value. The Company multiplied the selected royalty rate by the forecasted net revenue stream to calculate the cost savings (relief from royalty payment) associated with the asset. The cash flows are then discounted to present value using the selected discount rate and compared to the carrying value of the asset. In Fiscal 2017, Fiscal 2016 and Fiscal 2015, the Company tested the indefinite-lived intangible assets as required. As a result of this testing, in Fiscal 2016 and Fiscal 2015 the Company recorded a non-cash pretax trade name impairment charge to the Direct segment of approximately $173.0 million and $98.3 million, respectively, to the Intangible asset impairment line in the Consolidated Statements of Operations. During Fiscal 2017, the fair value exceeded the carrying value by 9.7%, and as such, no trade name impairment charges were recorded |
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Financial Instruments with Off-Balance-Sheet Risk | Financial Instruments with Off-Balance-Sheet Risk The Company entered into the Current ABL Facility on November 16, 2017, which provides for maximum borrowings of $175.0 million for the Company, subject to a borrowing base. The Current ABL Facility has a letter of credit sub-limit of $70.0 million and will mature no later than November 16, 2022, subject to customary extension provisions provided for therein. The Current ABL Facility is available for working capital and other general corporate purposes, and was undrawn, other than for letters of credit. Also on November 16, 2017, the Company terminated all loan related documents of the Prior ABL Facility and repaid all outstanding amounts thereunder. See Note 3, Debt. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company determines the fair value of financial instruments in accordance with accounting standards pertaining to fair value measurements. Such standards define fair value and establish a framework for measuring fair value in accordance with GAAP. Under fair value measurement accounting standards, fair value is considered to be the exchange price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. The Company reports or discloses the fair value of financial assets and liabilities based on the fair value hierarchy prescribed by accounting standards for fair value measurements, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. Total accounts receivable were $49.9 million and $39.3 million as of February 2, 2018 and January 27, 2017, respectively. Bad debt expense was $0.2 million, $0.3 million and $0.3 million in Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. At February 2, 2018 and January 27, 2017 accounts receivable included $2.0 million and $3.7 million, respectively, due from Sears Holdings. Cash and cash equivalents, Accounts receivable, Accounts payable and Other current liabilities are reflected in the Consolidated Balance Sheets at cost, which approximates fair value due to the short-term nature of these instruments. Long-term debt, net is reflected in the Consolidated Balance Sheets at amortized cost. The fair value of debt was determined utilizing level 2 valuation techniques based on the closing inactive market bid price on February 2, 2018 and January 27, 2017. See Note 7, Fair Value of Financial Assets and Liabilities. |
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Foreign Currency Translations and Transactions | Foreign Currency Translations and Transactions The Company translates the assets and liabilities of foreign subsidiaries from their respective functional currencies to United States dollars at the appropriate spot rates as of the balance sheet date. Revenue and expenses of operations are translated to United States dollars using weighted average exchange rates during the year. The foreign subsidiaries use the local currency as their functional currency. The effects of foreign currency translation adjustments are included as a component of Accumulated other comprehensive loss in the accompanying Consolidated Statements of Changes in Stockholders' Equity. The Company recognized a gain of $4.8 million in Fiscal 2017, an insignificant amount in Fiscal 2016 and a loss of $5.7 million in Fiscal 2015 in the accompanying Consolidated Statements of Operations. |
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Revenue Recognition | Revenue Recognition Revenues include sales of merchandise and delivery revenues related to merchandise sold. Revenue is recognized for the Direct segment when the merchandise is expected to be received by the customer and for the Retail segment at the time of sale in the store. Net revenues are reported net of estimated returns and allowances and exclude sales taxes. Estimated returns and allowances are recorded as a reduction of sales and cost of sales. The reserve for sales returns and allowances is calculated based on historical experience and future expectations and is included in Other current liabilities on the Consolidated Balance Sheets. Reserves for sales returns and allowances consisted of the following:
The Company sells gift certificates, gift cards and e-certificates (collectively, "gift cards") to customers through both the Direct and Retail segments. The gift cards do not have expiration dates. Revenue from gift cards are recognized when (i) the gift card is redeemed by the customer for merchandise, or (ii) after three years when the likelihood of the gift card being redeemed by the customer is remote ("gift card breakage") and the Company does not have a legal obligation to remit the value of the unredeemed gift cards to the relevant jurisdictions. Revenue recognized from gift card breakage was $1.6 million, $2.3 million and $2.2 million in Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. |
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Cost of Sales | Cost of Sales Cost of sales are comprised principally of the costs of merchandise, in-bound freight, duty, warehousing and distribution (including receiving, picking, packing, store delivery and value added costs), customer shipping and handling costs and physical inventory losses. Depreciation and amortization is not included in the Company's Cost of sales. The Company participates in Sears Holdings' SYW program. The expenses for this program are recorded in Cost of sales, as described in Note 11, Related Party Agreements and Transactions. |
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Selling and Administrative Expenses | Selling and Administrative Expenses Selling and administrative expenses are comprised principally of payroll and benefits costs for direct, retail and corporate employees, marketing, occupancy costs of retail stores and corporate facilities, buying, pre-opening costs and other administrative expenses. All stock-based compensation is recorded in Selling and administrative expenses. See Note 5, Stock-Based Compensation. Selling and administrative expenses included $47.1 million, $52.9 million and $56.6 million in Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively, of costs allocated or charged to the Company by Sears Holdings. See Note 11, Related Party Agreements and Transactions. |
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Restructuring Costs | Restructuring Costs During Fiscal 2017, the Company implemented an initiative to right-size its New York Office in an effort to create efficiencies and refocus the Company back to its corporate headquarters in Dodgeville, Wisconsin. The restructuring included certain headcount reductions and the exit of a facility. The total restructuring charge expected as a result of this action is approximately $4.2 million, of which $3.9 million has been incurred as of February 2, 2018. The following table summarizes the activity of the Company's restructuring accrual:
Termination costs consist of involuntary employee termination benefits and severance pursuant to a nonrecurring benefit arrangement recognized as part of a restructuring initiative. Other costs consist of non-termination type costs, including lease termination costs and incremental costs to consolidate or close facilities and relocate employees. |
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Other Operating Expense | Product Recall In Fiscal 2017 there were no product recalls. In Fiscal 2016 and Fiscal 2015, $0.2 million and $3.4 million, respectively, was reversed due to customer return rates for products recalled in Fiscal 2014 being lower than estimated despite the efforts by the Company to contact impacted customers. These reversals were recorded in Other operating income (expense), net. |
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Income Taxes | Income Taxes Deferred income tax assets and liabilities are based on the estimated future tax effects of differences between the financial and tax basis of assets and liabilities based on currently enacted tax laws. The tax balances and income tax expense recognized are based on management's interpretation of the tax laws of multiple jurisdictions. Income tax expense also reflects best estimates and assumptions regarding, among other things, the level of future taxable income and tax planning. Future changes in tax laws, changes in projected levels of taxable income, tax planning and adoption and implementation of new accounting standards could impact the effective tax rate and tax balances recorded. Tax positions are recognized when they are more likely than not to be sustained upon examination. The amount recognized is measured as the largest amount of benefit that is more likely than not to be realized upon settlement. The Company is subject to periodic audits by the United States Internal Revenue Service and other state and local taxing authorities. These audits may challenge certain of the Company's tax positions such as the timing and amount of income and deductions and the allocation of taxable income to various tax jurisdictions. The Company evaluates its tax positions and establishes liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. These tax uncertainties are reviewed as facts and circumstances change and are adjusted accordingly. This requires significant management judgment in estimating final outcomes. Interest and penalties are classified as Income tax expense in the Consolidated Statements of Operations. See Note 9, Income Taxes, for further details. The Company performed an evaluation over its deferred tax assets and determined that a valuation allowance is considered necessary. See Note 9, Income Taxes, for further details on the valuation allowance. Excluding the $173.0 million and $98.3 million non-cash impairment charges to the indefinite-lived intangible asset in Fiscal 2016 and Fiscal 2015, respectively, the Company would not be in a cumulative loss position. Lands' End and Sears Holdings Corporation entered into the Tax Sharing Agreement in connection with the Separation which governs Sears Holdings Corporation's and Lands' End's respective rights, responsibilities and obligations after the Separation with respect to liabilities for United States federal, state, local and foreign taxes attributable to the Lands' End business. In addition to the allocation of tax liabilities, the Tax Sharing Agreement addresses the preparation and filing of tax returns for such taxes and dispute resolution with taxing authorities regarding such taxes. Generally, Sears Holdings Corporation is liable for all pre-Separation United States federal, state and local income taxes. Lands' End generally is liable for all other taxes attributable to its business, including all foreign income taxes. |
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Self-Insurance | Self-Insurance The Company has a self-insured plan for health and welfare benefits and provides an accrual to cover the obligation. The accrual for the self-insured liability is based on claims filed and an estimate of claims incurred but not yet reported. The Company considers a number of factors, including historical claims information, when determining the amount of the accrual. Costs related to the administration of the plan and related claims are expensed as incurred. Total expenses were $16.5 million, $18.2 million and $16.2 million for Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. The Company also has a self-insured plan for certain costs related to workers' compensation. The Company obtains third-party insurance coverage to limit exposure to this self-insured risk. |
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Postretirement Benefit Plan | Postretirement Benefit Plan Effective January 1, 2006, the Company decided to indefinitely suspend eligibility to the postretirement medical plan for future company retirees. The Company has a 401(k) retirement plan, which covers most regular employees and allows them to make contributions. The Company also provides a matching contribution on a portion of the employee contributions. Total expense incurred under this plan was $3.2 million, $3.3 million and $3.3 million for Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. |
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Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Other comprehensive income (loss) encompasses all changes in equity other than those arising from transactions with stockholders, and is comprised solely of foreign currency translation adjustments, impact of the Tax Act on the translation adjustments and net income (loss).
As a result of the Tax Act, in Fiscal 2017, $2.4 million was reclassified out of Accumulated other comprehensive loss into Accumulated deficit in accordance with the adoption of ASU 2018-02, Income Statement - Reporting Comprehensive Income. See New Accounting Pronouncements for further discussion. No other amounts were reclassified out of Accumulated other comprehensive loss in the periods presented. |
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Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense for restricted stock units is determined based on the grant date fair value. The fair value is determined based on the Company's stock price on the date of the grant. The Company recognizes stock-based compensation cost net of estimated forfeitures and revises the estimates in subsequent periods if actual forfeitures differ from the estimates. The Company estimates the forfeiture rate based on historical data as well as expected future behavior. Stock-based compensation is recorded in Selling and administrative expense in the Consolidated Statements of Operations over the period in which the employee is required to provide service in exchange for the restricted stock units. |
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Earnings per Share | Earnings per Share The numerator for both basic and diluted EPS is net income attributable to Lands' End. The denominator for basic EPS is based upon the number of weighted average shares of Lands' End common stock outstanding during the reporting periods. The denominator for diluted EPS is based upon the number of weighted average shares of Lands' End common stock and common stock equivalents outstanding during the reporting periods using the treasury stock method in accordance with ASC 718, Compensation - Stock Compensation. The following table summarizes the components of basic and diluted EPS:
Stock awards are considered anti-dilutive based on the application of the treasury stock method or in the event of a net loss. There were 397,669, 163,633 and 41,994 anti-dilutive shares excluded from the diluted weighted average shares outstanding in Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively. |
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New Accounting Pronouncements | New Accounting Pronouncements Intangibles - Goodwill and Other In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other, which simplifies the test for goodwill impairment by removing the second step of the goodwill impairment test. Under the new guidance, a one-step quantitative test is conducted. The excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit, is recorded as the amount of goodwill impairment. The new guidance does not amend the optional qualitative assessment of goodwill impairment. This guidance was adopted by the Company during Fourth Quarter 2017 and did not have a material impact on the Company. See Note 2, Summary of Significant Account Policies - Goodwill and Indefinite-lived Intangible Asset Impairment Assessments, and Note 8, Goodwill and Indefinite-Lived Intangible Asset, for additional details on the methodology used for the annual impairment testing. Income Statement - Reporting Comprehensive Income In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income, in response to the Tax Cuts and Jobs Act enacted on December 22, 2017 by the U.S. federal government. The standard eliminates the stranded tax effects resulting from the Tax Cuts and Jobs Act by reclassifying the effect out of Accumulated other comprehensive loss and into Accumulated deficit. This guidance was adopted by the Company during Fourth Quarter 2017 and resulted in a $2.4 million reclassification on the Consolidated Balance Sheets from Accumulated other comprehensive loss to Accumulated deficit in the period the standard was adopted. See Note 2, Summary of Significant Account Policies - Accumulated Other Comprehensive Income (Loss), and Note 9, Income Taxes, for additional details. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which provides guidance for revenue recognition. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today's guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. This guidance was deferred by ASU 2015-14, Revenue from Contracts with Customers, issued by the FASB in August 2015, and will be effective for Lands' End in the first quarter of its fiscal year ending February 1, 2019. Subsequently, the FASB has also issued accounting standards updates which clarify the guidance. The Company has evaluated its revenue streams to determine whether each revenue stream would be impacted by the provisions of the new guidance, including differences in timing, measurement or presentation. The Company plans to adopt the new guidance using the modified retrospective approach, where policies are implemented on a propsective basis, with the accumulated historical impact recorded as an adjustment to Accumulated deficit in the period of implementation. While most revenue recognition policies are not expected to change, the Company has identified anticipated changes to our Consolidated Statement of Operations related to the timing of revenue recognition for gift card breakage where estimated breakage revenue will now be recognized over the breakage period as opposed to at the end. See Revenue of Breakage for Certain Prepaid Stored-Value Products below for further details. The Company has also identified a presentational change within its Consolidated Balance Sheets, where the reserve for returns will now be presented gross in Inventories, net and Other accrued liabilities. The impact of this presentational change is an increase to both accounts which is expected to range between $5 million and $8 million based on the seasonality of the business. The new guidance will also require increased disclosures. Recognition of Breakage for Certain Prepaid Stored-Value Products In March 2016, the FASB issued ASU 2016-04, Recognition of Breakage for Certain Prepaid Stored-Value Products. This update clarifies when it is acceptable to recognize the unredeemed portion of prepaid gift cards into income. This guidance will be effective for Lands' End in the first quarter of its fiscal year ending February 1, 2019. The Company has evaluated the impacts of this ASU and has identified a change in the timing of recognition of revenues from gift cards. Upon implementation, the Company will recognize breakage income over the breakage period for the estimated portion of unredeemed gift cards that is unlikely to be redeemed where the Company does not have a legal obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property. Implementing this guidance will result in a cumulative impact to be recognized in Accumulated deficit at the date of adoption of approximately $1 million for estimated gift card breakage occurring prior to Fiscal 2018, under the modified retrospective approach described under the preceding Revenue from Contracts with Customers section. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. This update clarifies guidance to reduce the current diversity in practice of the classification of certain cash receipts and cash payments within the Consolidated Statement of Cash Flows. This guidance will be effective for Lands' End in the first quarter of its fiscal year ending February 1, 2019. The Company does not believe the adoption of this ASU will have a material impact on the Company's Consolidated Financial Statements. Restricted Cash In November 2016, the FASB issued ASU 2016-18, Restricted Cash. This ASU requires the inclusion of restricted cash within Cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the Consolidated Statement of Cash Flows. This guidance will be effective for the Company in the first quarter of its fiscal year ending February 1, 2019. The Company does not believe the adoption of this ASU will have a material impact on the Company's Consolidated Financial Statements. Leases In February 2016, the FASB issued ASU 2016-02, Leases, which will replace the existing guidance in ASC 840, Leases. This ASU requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee would recognize a straight-line total lease expense. This guidance will be effective for the Company in the first quarter of its fiscal year ending January 31, 2020. While it is expected that the standard will have a material increase in the assets and liabilities recorded on the Company's Consolidated Balance Sheet, the Company is still evaluating the overall impact on the Company's Consolidated Financial Statements. Reclassifications In Fourth Quarter 2017, the Company reassessed the segment allocation of royalty revenues related to a retail location. These revenues were not material and have been reclassified from the Corporate Segment to the Retail Segment for all periods presented. In First Quarter 2017, the Company adopted ASU 2016-09, Compensation - Stock Compensation, which changed the required presentation of payments of employee withholding taxes on share-based compensation on the Consolidated Statement of Cash Flows from an operating activity to a financing activity. As a result of the adoption, the Company reclassified payments of employee withholding taxes on share-based compensation from Other operating liabilities for Fiscal 2016 and Fiscal 2015 to Payments of employee withholding taxes on share-based compensation. Other requirements of this guidance did not have a material impact on the Company's Consolidated Financial Statements. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of allowance for doubtful accounts | Changes in the balance of the allowance for doubtful accounts are as follows:
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Summary of property and equipment, net | Property and equipment, net consisted of the following:
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Schedule of sales returns and allowances reserve | Reserves for sales returns and allowances consisted of the following:
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Schedule of restructuring costs | The following table summarizes the activity of the Company's restructuring accrual:
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Schedule of accumulated other comprehensive income (loss) |
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Schedule of earnings per share, basic and diluted | The following table summarizes the components of basic and diluted EPS:
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Debt (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's Debt | The Company's debt consisted of the following:
(1) Debt facility terminated on November 16, 2017. |
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Company's borrowing availability under ABL Facility | The following table summarizes the Company's borrowing availability under the ABL Facilities:
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Schedule of aggregate scheduled maturities | The Company's aggregate scheduled maturities of the Term Loan Facility as of February 2, 2018 are as follows:
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||
Summary of future operating lease commitments | Total future commitments under these operating leases (primarily leased Lands' End Shops at Sears space at Sears Holdings locations as described in Note 11, Related Party Agreements and Transactions) as of February 2, 2018 are as follows for the fiscal years ending (in thousands):
(1) Minimum payments have not been reduced by minimum sublease rentals of $4.4 million due in the future under noncancelable subleases. The following table summarizes the fiscal years in which the remaining Lands' End Shops at Sears stores are currently contracted to expire during:
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Stock-Based Compensation (Tables) |
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Schedule of stock-based compensation expense | The following table summarizes the Company's stock-based compensation expense, which is included in Selling and administrative expense in the Consolidated Statements of Operations:
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Share-based Compensation Arrangements by Share-based Payment Award, Restricted Stock Units, Vested and Expected to Vest [Table Text Block] | The following table provides a summary of the activities for stock awards for Fiscal 2017:
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The following table provides a summary of the activities for stock awards for Fiscal 2016:
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The following assumptions were utilized in deriving the fair value for Option Awards granted during Fiscal 2017:
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Other Current Liabilities (Tables) |
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Summary of other current liabilities | Other current liabilities consisted of the following:
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Fair Value of Financial Assets and Liabilities (Tables) |
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Schedule of other financial assets and liabilities measured at fair value | Carrying values and fair values of other financial instruments in the Consolidated Balance Sheets are as follows:
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Goodwill and Indefinite-Lived Intangible Assets (Tables) |
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Schedule of goodwill and intangible assets | The following table summarizes the Company's indefinite-lived intangible asset and Goodwill:
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of income before income taxes | The Company's income (loss) before income taxes in the United States and in foreign jurisdictions is as follows:
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Schedule of components of the provision for income taxes | The components of the (benefit from) provision for income taxes are as follows:
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Reconciliation of the effective income tax rate | A reconciliation of the statutory federal income tax rate to the effective income tax rate is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of deferred tax assets and liabilities | Deferred tax assets and liabilities consisted of the following:
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Schedule of unrecognized tax benefits | A reconciliation of the beginning and ending amount of UTBs is as follows:
|
Related Party Agreements and Transactions (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 02, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related party revenue and costs | Related party revenue charged by the Company to Sears Holdings for the use of intellectual property or services is as follows:
Related party costs charged by Sears Holdings to the Company related to Lands' End Shops at Sears are as follows:
(1) During Fiscal 2017, Fiscal 2016 and Fiscal 2015, 42, 11 and 9 Lands' End Shops at Sears were closed, respectively. Related party costs charged by Sears Holdings to the Company for general corporate services are as follows:
|
Segment Reporting (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 02, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from external customers by products and services | is aggregated by product category in the following table:
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Schedule of financial information by segment | Financial information by segment is presented as follows:
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Summary of revenues based by geographic region | The following presents summarized geographical information:
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Summary of property and equipment by geographic region |
|
Quarterly Financial Data (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 02, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of quarterly financial data |
(1) The sum of the quarterly earnings per share—basic and diluted amounts may not equal the fiscal year amount due to rounding. (2) Fourth Quarter 2016 Net loss includes an impairment charge of $173.0 million related to the non-cash write-down of our trade name indefinite-lived asset, Lands' End. (3) Fourth Quarter 2017 Net income includes the impacts of the Tax Act reform. See Note 9, Income Taxes, for additional details. |
Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
Jan. 31, 2014 |
|
Accounting Policies [Abstract] | ||||
Allowance for Doubtful Accounts Receivable | $ 579 | $ 626 | $ 626 | $ 688 |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||
Beginning balance | 579 | 626 | ||
Provision | 187 | 281 | 286 | |
Write-offs | (129) | (328) | (348) | |
Ending balance | $ 637 | $ 579 | $ 626 |
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
|
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Revenue recognition gift card breakage | $ 1,600 | $ 2,300 | $ 2,200 |
Sales returns and allowances | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | 11,794 | 12,605 | 13,868 |
Provision | 159,440 | 143,410 | 166,579 |
Write-offs | (160,101) | (144,221) | (167,842) |
Ending balance | $ 11,133 | $ 11,794 | $ 12,605 |
Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Restructuring Costs (Details) $ in Thousands |
12 Months Ended |
---|---|
Feb. 02, 2018
USD ($)
| |
Restructuring Costs [Abstract] | |
Restructuring charges expected | $ 4,200 |
Restructuring Charges | 3,900 |
Restructuring Cost and Reserve [Line Items] | |
Beginning balance | 0 |
Provision | 3,921 |
Cash disbursements | (1,793) |
Non-cash items | 546 |
Ending balance | 2,674 |
Termination Benefits | |
Restructuring Cost and Reserve [Line Items] | |
Beginning balance | 0 |
Provision | 2,401 |
Cash disbursements | (1,793) |
Non-cash items | 0 |
Ending balance | 608 |
Other Costs | |
Restructuring Cost and Reserve [Line Items] | |
Beginning balance | 0 |
Provision | 1,520 |
Cash disbursements | 0 |
Non-cash items | 546 |
Ending balance | $ 2,066 |
Summary of Significant Accounting Policies - Summary of Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2018 |
Oct. 27, 2017 |
Jul. 28, 2017 |
Apr. 28, 2017 |
Jan. 27, 2017 |
Oct. 28, 2016 |
Jul. 29, 2016 |
Apr. 29, 2016 |
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
|||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||
Net income (loss) | $ 39,752 | [1] | $ 162 | [1] | $ (3,880) | [1] | $ (7,839) | [1] | $ (94,821) | [2] | $ (7,222) | [2] | $ (1,980) | [2] | $ (5,759) | [2] | $ 28,195 | $ (109,782) | $ (19,548) | ||||||
Basic weighted average shares outstanding | 32,076,000 | 32,021,000 | 31,979,000 | ||||||||||||||||||||||
Dilutive effect of stock awards (shares) | 34,000 | 0 | 0 | ||||||||||||||||||||||
Diluted weighted average shares outstanding | 32,110,000 | 32,021,000 | 31,979,000 | ||||||||||||||||||||||
Basic earnings per share (in dollars per share) | $ 1.24 | [3] | $ 0.01 | [3] | $ (0.12) | [3] | $ (0.24) | [3] | $ (2.96) | [3] | $ (0.23) | [3] | $ (0.06) | [3] | $ (0.18) | [3] | $ 0.88 | $ (3.43) | $ (0.61) | ||||||
Diluted earnings per share (in dollars per share) | $ 1.24 | [3] | $ 0.01 | [3] | $ (0.12) | [3] | $ (0.24) | [3] | $ (2.96) | [3] | $ (0.23) | [3] | $ (0.06) | [3] | $ (0.18) | [3] | $ 0.88 | $ (3.43) | $ (0.61) | ||||||
Antidilutive securities excluded from calculation (shares) | 397,669 | 163,633 | 41,994 | ||||||||||||||||||||||
|
Debt Long Term Debt (Details) - USD ($) $ in Thousands |
Feb. 02, 2018 |
Nov. 16, 2017 |
Jan. 27, 2017 |
Apr. 04, 2014 |
||||
---|---|---|---|---|---|---|---|---|
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.82% | 4.25% | ||||||
Long-term Debt, including short-term portion | $ 495,688 | $ 500,838 | ||||||
Less: current maturities in Other current liabilities | 5,150 | 5,150 | ||||||
Less: unamortized debt issuance costs | 4,290 | 5,645 | ||||||
Long-term debt, net | $ 486,248 | $ 490,043 | ||||||
Current ABL Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Interest Rate at Period End | 0.00% | 0.00% | ||||||
Prior ABL Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Interest Rate at Period End | [1] | 0.00% | 0.00% | |||||
Secured Debt | Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Secured Debt | $ 500,838 | $ 515,000 | ||||||
Domestic Letters of Credit | Current ABL Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 0 | $ 70,000 | 0 | |||||
Domestic Letters of Credit | Prior ABL Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 0 | [1] | 0 | [1] | $ 70,000 | |||
Carrying Amount | Fair Value, Inputs, Level 2 | Secured Debt | Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Secured Debt | $ 495,688 | $ 500,838 | ||||||
|
Debt ABL Facility (Details) - Line of Credit - USD ($) |
Feb. 02, 2018 |
Nov. 16, 2017 |
Jan. 27, 2017 |
Apr. 04, 2014 |
---|---|---|---|---|
Current ABL Facility | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 175,000,000 | $ 175,000,000 | $ 0 | |
Outstanding letters of credit | 22,328,000 | |||
Available borrowing under line of credit facility | 152,672,000 | |||
Prior ABL Facility | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 0 | 175,000,000 | $ 175,000,000 | |
Outstanding letters of credit | 19,705,000 | |||
Available borrowing under line of credit facility | $ 155,295,000 |
Debt - Schedule of Aggregate Maturities (Details) - USD ($) $ in Thousands |
Feb. 02, 2018 |
Jan. 27, 2017 |
---|---|---|
Debt Disclosure [Abstract] | ||
Less than 1 year | $ 5,150 | |
1 - 2 years | 5,150 | |
2 - 3 years | 5,150 | |
3 - 4 years | 480,238 | |
Total aggregate maturities | $ 495,688 | $ 500,838 |
Leases (Details) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Feb. 02, 2018
USD ($)
|
Jan. 27, 2017
USD ($)
|
Jan. 29, 2016
USD ($)
|
|||
Property Subject to or Available for Operating Lease [Line Items] | |||||
Related Party Transaction, Number of Stores with Related Party | 174 | ||||
Number of store locations the Company leases store space | 189 | ||||
Number of store locations the Company owns | 2 | ||||
Rental expense under operating leases | $ 27,200 | $ 30,600 | $ 31,100 | ||
Number of leases set to expire Fiscal 2018 | 94 | ||||
Number of leases set to expire Fiscal 2019 | 80 | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||||
2015 | $ 21,597 | ||||
2016 | 12,936 | ||||
2017 | 4,433 | ||||
2018 | 3,570 | ||||
2019 | 2,721 | ||||
Thereafter | 3,514 | ||||
Total minimum payments required | [1] | 48,771 | |||
Future minimum payments due | $ 4,400 | ||||
Lands' End Inlet Store locations | |||||
Property Subject to or Available for Operating Lease [Line Items] | |||||
Number of store locations the Company leases store space | 12 | ||||
Lands' End School Uniform Store locations | |||||
Property Subject to or Available for Operating Lease [Line Items] | |||||
Number of store locations the Company leases store space | 1 | ||||
|
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 3,951 | $ 2,230 | $ 2,395 |
Deferred Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 3,212 | $ 1,599 | $ 1,534 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 252 | 175 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 422 | 242 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | (70) | (27) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (107) | (138) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 497 | 252 | 175 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 24.42 | $ 30.87 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | 21.49 | 23.93 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | 22.66 | 33.53 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | 0.00 | 0.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | 24.85 | 30.05 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 22.07 | $ 24.42 | $ 30.87 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 3 months | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 7,300 | ||
Option Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 651 | $ 0 | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 0 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 0.00 | $ 0.00 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 0.00 | $ 0.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares | 0 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 343 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Number of Shares | 0 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares | 343 | 0 | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value | $ 0.00 | $ 0.00 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | 8.73 | 0.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price | 0.00 | 0.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value | $ 8.73 | $ 0.00 | $ 0.00 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years 1 month | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 2,300 | ||
Option Awards | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 18.10 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.82% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 45.59% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 6 years 3 months | ||
Option Awards | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 22.00 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.90% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 46.12% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 6 years 3 months | ||
Performance Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 88 | $ 631 | $ 861 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 69 | 109 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 0 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | (41) | (30) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (13) | (10) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 15 | 69 | 109 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 26.38 | $ 26.81 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | 0.00 | 0.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | 28.33 | 27.84 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | 0.00 | 0.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | 25.20 | 26.73 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 21.94 | $ 26.38 | $ 26.81 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 0 |
Other Current Liabilities (Details) - USD ($) $ in Thousands |
Feb. 02, 2018 |
Jan. 27, 2017 |
---|---|---|
Other Liabilities, Current [Abstract] | ||
Deferred gift card revenue | $ 19,272 | $ 19,999 |
Accrued employee compensation and benefits | 32,302 | 13,165 |
Reserve for sales returns and allowances | 11,133 | 11,794 |
Deferred revenue | 12,993 | 10,660 |
Accrued property, sales and other taxes | 6,663 | 7,578 |
Short-term portion of long-term debt | 5,150 | 5,150 |
Other | 12,744 | 18,100 |
Total other current liabilities | $ 100,257 | $ 86,446 |
Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands |
Feb. 02, 2018 |
Jan. 27, 2017 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash | $ 2,356 | $ 3,300 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash | $ 2,400 | $ 3,300 |
Fair Value of Financial Assets and Liabilities - Carrying and Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands |
Feb. 02, 2018 |
Jan. 27, 2017 |
Apr. 04, 2014 |
---|---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term Debt, including short-term portion | $ 495,688 | $ 500,838 | |
Fair Value, Inputs, Level 2 | Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term Debt, including short-term portion | 443,641 | 379,385 | |
Term Loan Facility | Secured Debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Secured Debt | 500,838 | $ 515,000 | |
Term Loan Facility | Secured Debt | Fair Value, Inputs, Level 2 | Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Secured Debt | $ 495,688 | $ 500,838 |
Goodwill and Indefinite-Lived Intangible Assets (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
|
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible asset impairment | $ 0 | $ 173,000,000 | $ 98,300,000 |
Impairment of goodwill or intangible assets | $ 0 | $ 0 |
Goodwill and Indefinite-Lived Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
|
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets, Gross Carrying Amount | $ 430,000 | ||
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | $ (173,000) | (98,300) |
Total intangible asset, net | 257,000 | 257,000 | |
Goodwill | $ 110,000 | $ 110,000 | $ 110,000 |
Income Taxes - Narrative (Details) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
Jan. 30, 2015 |
Apr. 04, 2014 |
|
Income Tax Examination [Line Items] | |||||
Federal Blended Rate | 33.80% | 35.00% | 35.00% | ||
Foreign net operating loss carryforwards | $ 8,600,000 | ||||
Deferred tax asset | 2,284,000 | $ 0 | |||
Unrecognized tax benefits | 4,531,000 | 6,901,000 | $ 8,311,000 | $ 9,082,000 | $ 4,200,000 |
Unrecognized tax benefits, if recognized, would impact effective tax rate | 3,000,000 | ||||
Fluctuation in unrecognized tax benefits | 2,500,000 | ||||
Amount of interest and penalties recognized | 3,200,000 | 4,900,000 | |||
Amount of interest and penalties recognized, net of federal benefit | 2,100,000 | 3,200,000 | |||
Provisional reduction in deferred tax liabilities | 29,700,000 | ||||
Provisional reduction to deferred liabilities on remitted foreign earnings | 5,200,000 | ||||
Provisional non recurring transition liability | 4,300,000 | ||||
Provisional income tax benefit | 30,600,000 | ||||
Other Liabilities | |||||
Income Tax Examination [Line Items] | |||||
Provisional non recurring transition liability | 3,900,000 | ||||
Other Current Liabilities | |||||
Income Tax Examination [Line Items] | |||||
Provisional non recurring transition liability | 400,000 | ||||
Sears Holdings Corporation | Other Assets | |||||
Income Tax Examination [Line Items] | |||||
Indemnification receivable, uncertain tax positions | $ 7,400,000 | $ 11,400,000 | $ 13,700,000 |
Income Taxes Income Taxes - Summary of Income Before Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
|
Income (loss) before income taxes: | |||
United States | $ 9,011 | $ (174,461) | $ (31,206) |
Foreign | (8,563) | (4,419) | 1,967 |
Income (loss) before income taxes | $ 448 | $ (178,880) | $ (29,239) |
Income Taxes - Summary the Components of Income Tax Provision (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
|
Income Tax Expense (Benefit), Continuing Operations, by Jurisdiction [Abstract] | |||
United States | $ (27,623) | $ (70,316) | $ (9,737) |
Foreign | (124) | 1,218 | 46 |
Total (benefit) provision | (27,747) | (69,098) | (9,691) |
Current: | |||
Federal | 4,804 | (2,834) | 10,524 |
State | 330 | (229) | 2,409 |
Foreign | (124) | 1,218 | 46 |
Total current | 5,010 | (1,845) | 12,979 |
Deferred: | |||
Federal | (34,901) | (62,645) | (20,956) |
State | 2,144 | (4,608) | (1,714) |
Total deferred | (32,757) | (67,253) | (22,670) |
Total (benefit) provision | $ (27,747) | $ (69,098) | $ (9,691) |
Income Taxes - Reconciliation of Effective Tax Rate (Details) |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
|
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Tax at statutory federal income tax rate | 33.80% | 35.00% | 35.00% |
State income taxes, net of federal tax benefit | 103.50% | 2.70% | (1.60%) |
Foreign differential | 108.60% | 0.00% | 0.00% |
Permanent differential | 383.10% | (0.70%) | (1.90%) |
Tax reform revaluation of deferred taxes | (7793.70%) | 0.00% | 0.00% |
Transition tax on repatriated foreign earnings | 950.90% | 0.00% | 0.00% |
Uncertain tax benefits | (600.10%) | 0.80% | 1.30% |
Change in foreign valuation allowance | 509.80% | 0.00% | 0.00% |
Other, net | 110.60% | 0.80% | 0.30% |
Total at effective income tax rate | (6193.50%) | 38.60% | 33.10% |
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Feb. 02, 2018 |
Jan. 27, 2017 |
|
Deferred tax assets: | ||
Deferred revenue | $ 3,292,000 | $ 4,903,000 |
Legal and other reserves | 1,512,000 | 1,892,000 |
Deferred compensation | 4,029,000 | 4,653,000 |
Reserve for returns | 2,301,000 | 3,578,000 |
Inventory | 3,099,000 | 7,817,000 |
Currency translation adjustment - foreign subsidiaries | 2,816,000 | 6,691,000 |
Other | 4,330,000 | 8,197,000 |
Total deferred tax assets | 21,379,000 | 37,731,000 |
Foreign net operating loss carryforward | 2,284,000 | 0 |
Less valuation allowance | (2,284,000) | 0 |
Net deferred tax assets | 21,379,000 | 37,731,000 |
Deferred tax liabilities: | ||
Intangible assets | 62,754,000 | 96,812,000 |
LIFO reserve | 16,659,000 | 24,601,000 |
Unremitted foreign earnings | 0 | 5,208,000 |
Catalog marketing | 1,103,000 | 1,577,000 |
Total deferred tax liabilities | 80,516,000 | 128,198,000 |
Net deferred tax liability | $ 59,137,000 | $ 90,467,000 |
Income Taxes - Summary of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross UTB balance at beginning of period | $ 6,901 | $ 8,311 | $ 9,082 |
Tax positions related to the current period—gross increases | 0 | 120 | 116 |
Tax positions related to the prior periods—gross decreases | (2,370) | (1,530) | (697) |
Settlements | 0 | 0 | (190) |
Gross UTB balance at end of period | $ 4,531 | $ 6,901 | $ 8,311 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Feb. 02, 2018 |
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
|
Gain Contingencies | ||||
Litigation Settlement, Amount Awarded from Other Party | $ 7.5 | $ 1.0 | $ 2.4 | $ 0.9 |
Related Party Agreements and Transactions (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2018 |
Jan. 27, 2017 |
Apr. 04, 2014 |
|
Related Party Transaction | |||
Related Party Transactions, sale of debt | $ 4.0 | ||
Related Party Transaction, discount on sale of debt | 1.0 | ||
Sears Holdings Corporation | Accounts Receivable, Net | |||
Related Party Transaction | |||
Accounts receivable, net, due from related party | 2.0 | $ 3.7 | |
Sears Holdings Corporation | Accounts payable | |||
Related Party Transaction | |||
Accounts payable, due to related party | 2.9 | 3.1 | |
Sears Holdings Corporation | Other Assets | |||
Related Party Transaction | |||
Indemnification receivable, uncertain tax positions | $ 7.4 | $ 11.4 | $ 13.7 |
Related Party Agreements and Transactions - Schedule of Related Party Costs (Details) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Feb. 02, 2018
USD ($)
store_location
|
Jan. 27, 2017
USD ($)
store_location
|
Jan. 29, 2016
USD ($)
store_location
|
|||
Related Party Transaction | |||||
Related Party Transaction, Number of Stores with Related Party | 174 | ||||
Sears Holdings Corporation | |||||
Related Party Transaction | |||||
Related Party Transaction, Number of Stores with Related Party | [1] | 174 | 216 | 227 | |
Number of Lands' End Shops at Sears closed in period | store_location | 42 | 11 | 9 | ||
Sears Holdings Corporation | Retail services, store labor | |||||
Related Party Transaction | |||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 21,934 | $ 24,052 | $ 26,773 | ||
Sears Holdings Corporation | Rent, CAM and occupancy costs | |||||
Related Party Transaction | |||||
Related Party Transaction, Expenses from Transactions with Related Party | 22,084 | 24,727 | 25,239 | ||
Sears Holdings Corporation | Financial services and payment processing | |||||
Related Party Transaction | |||||
Related Party Transaction, Expenses from Transactions with Related Party | 2,455 | 2,834 | 2,792 | ||
Sears Holdings Corporation | Supply chain costs | |||||
Related Party Transaction | |||||
Related Party Transaction, Expenses from Transactions with Related Party | 741 | 979 | 985 | ||
Sears Holdings Corporation | Total expenses | |||||
Related Party Transaction | |||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 47,214 | $ 52,592 | $ 55,789 | ||
|
Related Party Agreements and Transactions - Details of General Corporate Services (Details) - Sears Holdings Corporation - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
|
Sourcing | |||
Related Party Transaction | |||
Related Party Transaction, Expenses from Transactions with Related Party | $ 10,243 | $ 10,878 | $ 9,609 |
Shop Your Way | |||
Related Party Transaction | |||
Related Party Transaction, Expenses from Transactions with Related Party | 1,119 | 2,301 | 2,896 |
Shared services | |||
Related Party Transaction | |||
Related Party Transaction, Expenses from Transactions with Related Party | 176 | 192 | 484 |
Total expenses | |||
Related Party Transaction | |||
Related Party Transaction, Expenses from Transactions with Related Party | $ 11,538 | $ 13,371 | $ 12,989 |
Related Party Agreements and Transactions - Details of Use of Intellectual Property or Services (Details) - Sears Holdings Corporation - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
|
Related Party Transaction | |||
Related party revenue, net | $ 3,366 | $ 11,117 | $ 11,423 |
Call center services | |||
Related Party Transaction | |||
Related party revenue, net | 1,160 | 8,207 | 8,564 |
Lands' End business outfitters revenue | |||
Related Party Transaction | |||
Related party revenue, net | 1,045 | 1,574 | 1,398 |
Credit card revenue | |||
Related Party Transaction | |||
Related party revenue, net | 980 | 1,147 | 1,274 |
Royalty income | |||
Related Party Transaction | |||
Related party revenue, net | 213 | 221 | 220 |
Gift card revenue (expense) | |||
Related Party Transaction | |||
Related party revenue, net | $ (32) | $ (32) | $ (33) |
Segment Reporting (Details) |
12 Months Ended |
---|---|
Feb. 02, 2018
segment
| |
Segment Reporting [Abstract] | |
Number of reportable business segments | 2 |
Segment Reporting - Details by Product Category, Segment and Geographic Region (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2018 |
Oct. 27, 2017 |
Jul. 28, 2017 |
Apr. 28, 2017 |
Jan. 27, 2017 |
Oct. 28, 2016 |
Jul. 29, 2016 |
Apr. 29, 2016 |
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
|||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Total merchandise sales and services, net | $ 510,633 | $ 325,489 | $ 302,190 | $ 268,365 | $ 458,841 | $ 311,476 | $ 292,010 | $ 273,433 | $ 1,406,677 | $ 1,335,760 | $ 1,419,778 | ||||||||||||
Total adjusted EBITDA | 58,264 | 39,832 | 107,288 | ||||||||||||||||||||
Gain (Loss) on Disposition of Assets | (348) | (672) | (44) | ||||||||||||||||||||
Business Exit Costs | 3,921 | 0 | 0 | ||||||||||||||||||||
Product recall | 0 | (212) | (3,371) | ||||||||||||||||||||
Depreciation and amortization | 24,910 | 19,003 | 17,399 | ||||||||||||||||||||
Impairment of Intangible Assets (Excluding Goodwill) | 0 | 173,000 | 98,300 | ||||||||||||||||||||
Operating (loss) income | 29,690 | 5,941 | 174 | (6,720) | (148,434) | [1] | (3,423) | [1] | 2,712 | [1] | (3,486) | [1] | 29,085 | (152,631) | (5,084) | ||||||||
Interest Expense | 25,929 | 24,630 | 24,826 | ||||||||||||||||||||
Income Tax Expense (Benefit) | (27,747) | (69,098) | (9,691) | ||||||||||||||||||||
Total assets | 1,124,135 | 1,114,391 | 1,124,135 | 1,114,391 | |||||||||||||||||||
Total capital expenditures | 38,145 | 33,319 | 22,224 | ||||||||||||||||||||
Total property and equipment, net | 136,501 | 122,836 | 136,501 | 122,836 | |||||||||||||||||||
Other Nonoperating Income (Expense) | (2,708) | (1,619) | 671 | ||||||||||||||||||||
Net Income (Loss) Attributable to Parent | 39,752 | [2] | $ 162 | [2] | $ (3,880) | [2] | $ (7,839) | [2] | (94,821) | [1] | $ (7,222) | [1] | $ (1,980) | [1] | $ (5,759) | [1] | 28,195 | (109,782) | (19,548) | ||||
Operating segments | Direct | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Total merchandise sales and services, net | 1,234,115 | 1,149,149 | 1,214,993 | ||||||||||||||||||||
Total adjusted EBITDA | 104,632 | 78,582 | 141,936 | ||||||||||||||||||||
Depreciation and amortization | 22,279 | 15,877 | 13,916 | ||||||||||||||||||||
Total assets | 856,986 | 805,201 | 856,986 | 805,201 | |||||||||||||||||||
Total capital expenditures | 37,893 | 32,590 | 21,630 | ||||||||||||||||||||
Operating segments | Retail | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Total merchandise sales and services, net | 172,562 | 186,611 | 204,785 | ||||||||||||||||||||
Total adjusted EBITDA | (7,866) | (5,339) | (301) | ||||||||||||||||||||
Depreciation and amortization | 1,277 | 1,674 | 2,029 | ||||||||||||||||||||
Total assets | 49,933 | 69,792 | 49,933 | 69,792 | |||||||||||||||||||
Total capital expenditures | 123 | 635 | 318 | ||||||||||||||||||||
Corporate/other | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Total adjusted EBITDA | (38,502) | (33,411) | (34,347) | ||||||||||||||||||||
Depreciation and amortization | 1,354 | 1,452 | 1,454 | ||||||||||||||||||||
Total assets | 217,216 | 239,398 | 217,216 | 239,398 | |||||||||||||||||||
Total capital expenditures | 129 | 94 | 276 | ||||||||||||||||||||
Apparel | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Total merchandise sales and services, net | 1,144,950 | 1,086,439 | 1,156,047 | ||||||||||||||||||||
Non-apparel | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Total merchandise sales and services, net | 176,287 | 168,945 | 183,073 | ||||||||||||||||||||
Services and other | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Total merchandise sales and services, net | 85,440 | 80,376 | 80,658 | ||||||||||||||||||||
United States | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Total merchandise sales and services, net | 1,204,199 | 1,143,529 | 1,211,226 | ||||||||||||||||||||
Total property and equipment, net | 126,015 | 113,045 | 126,015 | 113,045 | |||||||||||||||||||
Europe | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Total merchandise sales and services, net | 134,543 | 125,410 | 136,890 | ||||||||||||||||||||
Total property and equipment, net | 9,862 | 9,075 | 9,862 | 9,075 | |||||||||||||||||||
Asia | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Total merchandise sales and services, net | 48,704 | 50,030 | 51,808 | ||||||||||||||||||||
Total property and equipment, net | $ 624 | $ 716 | 624 | 716 | |||||||||||||||||||
Other foreign | |||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||
Total merchandise sales and services, net | $ 19,231 | $ 16,791 | $ 19,854 | ||||||||||||||||||||
|
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2018 |
Oct. 27, 2017 |
Jul. 28, 2017 |
Apr. 28, 2017 |
Jan. 27, 2017 |
Oct. 28, 2016 |
Jul. 29, 2016 |
Apr. 29, 2016 |
Feb. 02, 2018 |
Jan. 27, 2017 |
Jan. 29, 2016 |
|||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | $ 173,000 | $ 98,300 | ||||||||||||||||||||||
Net revenue | $ 510,633 | $ 325,489 | $ 302,190 | $ 268,365 | $ 458,841 | $ 311,476 | $ 292,010 | $ 273,433 | 1,406,677 | 1,335,760 | 1,419,778 | ||||||||||||||
Gross profit | 198,421 | 141,974 | 134,165 | 122,643 | 176,935 | 133,651 | 136,152 | 129,670 | 597,203 | 576,408 | 652,589 | ||||||||||||||
Operating (loss) income | 29,690 | 5,941 | 174 | (6,720) | (148,434) | [1] | (3,423) | [1] | 2,712 | [1] | (3,486) | [1] | 29,085 | (152,631) | (5,084) | ||||||||||
Net income (loss) | $ 39,752 | [2] | $ 162 | [2] | $ (3,880) | [2] | $ (7,839) | [2] | $ (94,821) | [1] | $ (7,222) | [1] | $ (1,980) | [1] | $ (5,759) | [1] | $ 28,195 | $ (109,782) | $ (19,548) | ||||||
Basic earnings per share (in dollars per share) | $ 1.24 | [3] | $ 0.01 | [3] | $ (0.12) | [3] | $ (0.24) | [3] | $ (2.96) | [3] | $ (0.23) | [3] | $ (0.06) | [3] | $ (0.18) | [3] | $ 0.88 | $ (3.43) | $ (0.61) | ||||||
Diluted earnings per share (in dollars per share) | $ 1.24 | [3] | $ 0.01 | [3] | $ (0.12) | [3] | $ (0.24) | [3] | $ (2.96) | [3] | $ (0.23) | [3] | $ (0.06) | [3] | $ (0.18) | [3] | $ 0.88 | $ (3.43) | $ (0.61) | ||||||
Merchandise sales and services, net to net sales, percentage | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | |||||||||||||||||
Gross margin to net sales, percentage | 38.90% | 43.60% | 44.40% | 45.70% | 38.60% | 42.90% | 46.60% | 47.40% | |||||||||||||||||
Operating income to net sales, percentage | 5.80% | 1.80% | 0.10% | (2.50%) | (32.30%) | [1] | (1.10%) | [1] | 0.90% | [1] | (1.30%) | [1] | |||||||||||||
Net income to net sales, percentage | 7.80% | [2] | 0.00% | [2] | (1.30%) | [2] | (2.90%) | [2] | (20.70%) | [1] | (2.30%) | [1] | (0.70%) | [1] | (2.10%) | [1] | |||||||||
|
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