Among Monday’s bullish price surprises for Nasdaq-listed stocks, Wisconsin-based omnichannel retailer Lands’ End (LE) had the second-highest standard deviation at 4.25. 

The standard deviation is the move made by a stock in the latest trading session compared to its 20-day average. Standard deviation is used rather than price change because it allows you compare the volatility of different stocks. Apples to apples. 

The 4.25 standard deviation means that Lands’ End stock’s 33.52% gain yesterday was 4.25 times higher than the expected 1-day return based on its 20-day historical volatility. 

The big move was due to the company’s joint venture announcement with WHP Global, a New York-based brand management business, whose current brands include Toys “R” Us, Vera Wang, Anne Klein, and others. 

Think of it as a smaller version of Authentic Brands, whose 50+ brands generate annual retail revenues in excess of $38 billion, about 5.5 times WHP Global’s.

It’s been years since I’ve thought about LE stock. It’s good to see it’s still alive and kicking—Sears Holdings spun it off in April 2014. It’s never a good thing when a licensing firm comes aboard. 

While its share price is trading at a level rarely seen in the past four years, it’s nowhere near its December 2014 all-time high of $56.25. 

I’m left wondering if this is the beginning of the end or a new beginning for Lands’ End. 

Here are my two cents on the subject. 

The Best Deal Management Could Make

Ten months after the company announced that the board had initiated a review of strategic alternatives to maximize shareholder value, Lands’ End yesterday announced that its joint venture with WHP Global was the best option for the company's future success. 

“After carefully reviewing the full range of strategic alternatives available to the Company, the Board determined that this structure delivers Lands’ End stockholders superior long-term, risk-adjusted value by combining immediate balance sheet strength with retained upside and operational continuity,” stated board chair Josephine Linden.

The terms of the deal are pretty straightforward. 

1. WHP Global paid $300 million for a 50% controlling stake in the joint venture, which will own all of Lands’ End’s intellectual property and brand-related assets, including the company’s licensing business and agreements. 

2. WHP Global will acquire approximately 7% of LE stock in a tender offer that values the stake at $100 million. 

3. Lands’ End obtains a long-term licensing agreement to operate its direct-to-consumer and business-to-business operations. 

4. WHP Global will receive a guaranteed minimum royalty payment of $50 million in year one, moving up from its base, based on its ability to generate increased revenues from brand extensions, etc. 

As I mentioned, the board feels this is the best possible alternative that they explored over the past 10 months. Existing shareholders will have to take them at their word. 

Where to From Here?

This isn’t the company’s first turnaround situation. Not only did it struggle in the final years under Sears’ ownership, but it also brought in a former Dolce & Gabbana executive, Federica Marchionni, in February 2015, to take the Lands’ End brand more upscale; she was gone by September 2016, replaced by Jerome Griffith in March 2017. 

He began a turnaround that included reducing the number of items it sold from over 4,000 to 2,400, selling Lands’ End clothing through Amazon (AMZN), and expanding its standalone retail store network. 

Griffith retired from the company in January 2023, almost six years after grabbing the reins. During his tenure, revenues grew by 16% to $1.56 billion in fiscal 2022. Its operating income rose in five of those six years, indicating a moderately successful turnaround. 

Griffith was replaced by former American Eagle Outfitters (AEO) international executive Andrew McLean. McLean remains Lands’ End’s CEO. He had this to say about the WHP Global tie-up:

“With a strengthened balance sheet, Lands’ End will be well positioned to execute on opportunities to drive growth and stockholder value, particularly across our direct to consumer and B2B businesses,” McLean stated in the joint venture press release. 

While sales have retreated in the three years since Griffith stepped down, its operating profits have remained intact, so it remains profitable. 

In the latest quarter ended Oct. 31, 2025, Lands’ End’s Licensing and Retail segment accounted for just 6.4% of its $317.5 million in revenue. While the company doesn’t break out the two, let’s assume licensing accounted for 60% and retail 40%. That would be about $12 million in licensing revenue. Annualize to $50 million with a 75% margin, and that accounts for much or all of Lands’ End’s profitability. 

I can’t say with 100% certainty how profitable the company’s licensing arrangements are, especially since I haven’t followed it in years, but, in general, retailers who do this achieve profit margins of 75% or higher on the royalties they earn.

Clearly, it's the U.S. eCommerce and Outfitters business, which supplies uniforms to other companies, that will be McLean’s primary focus. They accounted for 81% of its revenue in Q3 2025. 

Lands’ End Got a Good Deal -- But Is It Enough?

Lands’ End gets $300 million in cash from the joint venture. That allows it to pay off the $234 million outstanding on its term loan as of Oct. 31, bringing its total debt down to $91 million. 

That’s the good news. The bad news is that it now has to pay a minimum of $50 million in annual royalties, regardless of what WHP Global can bring to the table in new revenue streams. 

My simple math concludes that the licensing business is valued at $600 million — WHP Global’s $300 million cash payment, doubled, to account for Lands’ End’s 50%.

Based on a $50 million royalty from Lands’ End, it would take WHP Global just six years to recoup its investment, without even breaking a sweat. Lands’ End gets a significant amount of cash (approximately 35% of its $861 million enterprise value, according to S&P Global Market Intelligence).

Further, WHP Global will make a tender offer to purchase $100 million of Lands’ End’s stock at $45 per share, allowing shareholders to exit at a much higher price well above its current trading price. 

That’s a win/win all around.

The problem is that this might not be enough for Lands’ End’s survival long-term. The business it retains isn’t very profitable or growing.

There might be additional value if WHP Global goes public, Lands’ End converts its 50% stake in the joint venture into WHP stock, and WHP’s business goes on a big run, increasing the value of the stock beyond $300 million.

Which brings me back to the question: Is Lands’ End’s Licensing JV the Beginning of the End or a New Beginning?

I say neither.  

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