Overview
Lands' End Inc. stock surged 28% on Monday following the announcement of a joint venture agreement with WHP Global that will provide the apparel company with $300 million in gross proceeds. Under the terms, Lands' End will contribute all of its intellectual property and related assets into a newly formed 50/50 joint venture, and WHP Global will pay $300 million for its controlling interest in that entity.
Use of proceeds and operational arrangements
The company said it intends to apply the $300 million to fully repay its outstanding term loan, which is approximately $234 million, and to support general corporate purposes. Lands' End will continue to operate its existing direct-to-consumer and business-to-business operations, preserving day-to-day control over those businesses.
Under the agreement, the joint venture will oversee the brand's intellectual property portfolio. WHP Global has been designated to lead the venture's global licensing efforts and broader brand expansion strategy, while Lands' End will pay royalties to the joint venture for ongoing use of the brand. The royalty payments are scheduled to start at $50 million for the first year.
Tender offer and potential equity conversion
As part of the transactions, WHP Global will also initiate a tender offer to acquire up to $100 million of Lands' End common stock at $45 per share, which could translate to WHP Global obtaining as much as 7% of Lands' End's outstanding shares. In addition, Lands' End may hold the right to exchange its interest in the joint venture for equity in WHP Global in connection with certain monetization events, enabling Lands' End stockholders to participate in future value creation tied to WHP Global under those circumstances.
Timing and conditions
The parties expect the transactions to close in the first half of 2026, subject to regulatory approvals and customary closing conditions.
Summary of key developments
- Formation of a 50/50 joint venture with WHP Global involving transfer of Lands' End intellectual property and related assets.
- $300 million in gross proceeds paid by WHP Global for its controlling stake, with proceeds to repay approximately $234 million term loan and for general corporate purposes.
- WHP Global to lead global licensing and brand expansion; Lands' End to retain operational control and pay royalties starting at $50 million in year one.
Note: The transactions remain subject to regulatory approval and other standard closing requirements.