We are reiterating our Buy rating and raising our price target for Lands’ End to $45 (from $20), after the company announced a 50/50 joint venture with leading global brand licensee WHP Global purchasing a controlling interest in the intellectual property associated with the Lands’ End brand for $300 million in cash to Lands’ End. The cash payment will enable Lands’ End to become debt free by paying down the $234 million term loan currently outstanding. Further, WHP Global will tender for up to $100 million in LE shares at a price of $45 per LE Share. The initial minimum licensing payment to the new joint venture will be $50 million. Lands’ End management expects to close the transaction with WHP in 1H26. We view this deal as transforming Lands’ End, amply demonstrating the impressive value management has continued to add to the brand and, with the company unlevered, allowing for more aggressive expansion. As such, we are comfortable raising our price target to reflect the impending transaction (and subsequent $45 tender offer for 7% of the LE shares outstanding).
