Lands’ End, Inc. entered into a new term loan of $260 million. The company used the proceeds to refinance its existing term loan ahead of maturity in September 2025.
The loan is secured by a first lien on all non-ABL assets and a second lien on all ABL assets. Interest is payable monthly at an initial rate of 8.25 percent per annum plus the greater of SOFR or 2.0 percent. The initial rate is subject to a reduction to 8.00 percent and 7.75 percent based on the company’s debt and EBITDA levels. Amortization is payable quarterly at 1.25 percent of the original principal amount. The loan matures in December 2028.
“The completion of this refinancing initiative is an important step in Lands’ End’s trajectory and provides us with more favorable terms under which we can continue to invest in the growth and evolution of the company,” said Bernard McCracken, chief financial officer. “Our performance in 2023 has been characterized by steady improvements throughout the year, including expanding gross margin by approximately 700 basis points and reducing our inventory position year-over-year by 25 percent in the third quarter of 2023, and underpins our confidence in our ability to drive long-term profitable growth.”
Andrew McLean, chief executive officer, added, “On the heels of our strong third quarter, it’s clear that Lands’ End’s solutions-based strategy is delivering compelling results. Through our focus on injecting newness across our assortment and reaching new and prospective customers in the most impactful ways, which collectively are helping us drive more profitable sales, we have significantly improved our operating and financial position and paved the way for sustainable growth. As we look to 2024 and beyond, we plan to build on our progress by further enhancing efficiency, reducing our costs and ensuring we are best positioned to create value for our stakeholders over the long term.”
Perella Weinberg Partners advised Lands’ End on the refinancing transaction. The lending group includes Blue Torch Capital, Sculptor Capital Management, JPMorgan, and Arbour Lane Capital Management.
Image courtesy Lands’ End
