Lands’ End secured a new term loan of $275 million. The loan proceeds, combined with borrowings under Land’s End’s ABL facility, were used to refinance the company’s term loan, which was due in April 2021. Upon the closing of the refinancing, maximum availability under the ABL facility was expanded by $75 million to $275 million.
“We are pleased to announce the completion of this refinancing, which accomplished several important objectives, including extending our debt duration and further enhancing our strong liquidity position with a more flexible balance sheet,” Jim Gooch, CFO of Lands’ End, said. “The strong performance we delivered in the second quarter provided further leverage for us to successfully complete this financing with attractive terms. Our dynamic e-commerce foundation, limited brick and mortar exposure, and key item basics business, successfully combined with our lean operating structure, enabled us to more than triple EBITDA in the second quarter compared to the prior year. With the strong momentum in our business, along with this enhanced financial flexibility, we are optimally positioned to continue to execute our long-term growth strategies.”
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 9.75% per annum plus the greater of LIBOR or 1.0%. Amortization is payable quarterly at 1.25% of the original principal amount. The loan matures in September 2025.
JP Morgan advised Land’s End on the transaction. The lending group consisted of affiliates of Fortress Investment Group, STORY3 Credit Partners and Blue Torch Capital.
The refinancing announcement follows the release of Q2/20 results that were highlighted by a 23.6% revenue growth in global e-commerce, net income of $4.4 million (compared to a net loss of $3.0 million in the same period last year) and adjusted EBITDA of $23.9 million, more than triple the same period last year.
“We are very pleased to have delivered a strong second quarter leveraging the strong momentum in our global e-commerce business,” Jerome Griffith, CEO and president of Land’s End, said. “Our performance reflects the execution of our strategies related to product innovation, our global e-commerce platform, data-driven marketing, and commitment to optimizing our business processes and infrastructure. We will continue to build on our offering of high-quality value-oriented product assortments with growth strategies that expand our customer reach. To cap this period with a successful refinancing of our term loan debt positions us for future growth and success.”
