I told all of you as we've been starting some of these presentations, I love brands. Brands have meaning, they're relevant, they cross generations. One of the brands that does that is Lands' End. I am thrilled to have with us today the CEO of Lands' End, Charlie Cole, who is newer, and basically after leading digital and e-commerce companies through customer engagement and brand transformation. We will hear what he has to say about the opportunities for Lands' End, while also having with us Bernie McCracken, the CFO of Lands' End, who has been there for nearly 12 years now in total. Correct. knows all the ins and outs. In getting started, Charlie, tell us your background a little bit and your vision for Lands' End. I am a If you strip off all the veneers of titles and success and failure, I am a math geek turned digital marketer turned e-commerce operator. That is really what I have done my entire career. CEO four times, twice as a founder, twice as a private equity operator, and then did chief digital officer work for larger brands like Tumi, Samsonite, Lucky Brand. I think what attracted me to this job is exactly what you just said, is that I think brands today are a bit of a cheat code. If you have a brand and you can actually amplify it in a way, and if you combine the best of what it means to be a creatively driven brand with modern day digital talent, I think that is the real vision for Lands' End. Because we have an unfair advantage of 60 years of data because we are not just a brand, we are a direct consumer brand and a catalog brand, so that data really is something that if you can unleash it using technology, it is going to be a fun ride. That is the vision is I think Lands' End has to be the most progressive digital company in the world. I know that sounds a little bit highfalutin, but I can promise you that is sort of where we are trying to take the business. You have also referred it to, you have the opportunity to be a modern AI engine. Yeah. With all your data that you have. Yes. Genders, preferences. What does it look like? If you think about, there's this buzzword in e-commerce that's been overused for a decade, and this concept of personalization. Really it's been a misnomer because most people have actually been driving segmentation as opposed to personalization. But with just the macro AI horsepower at our fingertips today, if you build the correct engine behind your website, behind your stores, behind your CRM practice, it can be truly transformative to the customer experience. I'll give you a real example, something we rolled out six days ago. Imagine a world where you have multiple sets of data, both customer data of your past purchase history, browsing behavior, email open, send, click, whatever it might be. Then we basically say, "Okay, these are the five promotions that you can use. Let's say one's 10% off, one's 20% off, one's 30% off, one's buy one, get one free, whatever. Those are the promotions, and here are the four categories we really want to push. Outerwear, sweaters, cashmere and bottoms. Then you basically just say, "Go." The next thing that happens is you get a custom text-based email that says, "Hey, Dana, we noticed that last year you bought the Squall outerwear jacket in blue. We wanted to let you know it was just marked down, so if you wanted other sizes, we'd give you 20% off." Zero human in the loop. Zero. We rolled that out six days ago, and we're seeing open rates about 4X that of a typical email. That's a perfect kind of anecdotal example of what an AI engine can do. Where, if you think about what I just said, you have predictive behavior of your past purchase history. If I had your browsing data, even better, because maybe I know you have a proclivity for blue or small or whatever it may be. Color black. Black. That's my color. I walked into that one. Imagine that in creative marketing on Instagram. Imagine that on our website. Imagine that on our product description pages where you land on it, and the photography is literally different for Dana than it is for Bernie. All that stuff now is readily possible if you have the correct engine behind your business. That's really what we're looking to build, and we're in the process of building. I'm really proud of this concierge pilot we just rolled out because between Bernie and I, we have 12 years and two months of Lands' End experience. For us to pull that off in my first two and a half months, I'm pretty stoked about it. Also, Lands' End has been known as a product solutions company. Yeah. How do you see product advancement going forward? Well, look, one of the things I always try to remind ourselves of is that all this stuff I'm talking around technology, it's only as good as our product. It's only as good as the clothes, and if we forget we're a clothes company, we're really missing something. I tell our designers and our merchants all the time that we have got to be generatively creative. We have to start with humans really thinking about design and thinking about product, but then listen to our customers and get data feedback loops to evolve the product. I think that's a real important separation. You have generation, which is like, hey One of the things I've always loved, a quote I've always loved, was actually by Karl Lagerfeld, which is, he's like, "People don't tell me what the trend is. I tell them what the trend is. Which if you've ever met Karl, that's like a perfect Karl Lagerfeld quote. I really do want us basically putting stuff out there that is truly from our brain and not necessarily because a bunch of customers told us what to do. However, then as we get feedback like, "Hey, this works really well," "This doesn't work really well," "I like this fabrication," "The fitting is good." It's this combination of product being very creatively driven, but with those same analytical feedback loops that drive the AI engine that I'm talking about. That's really the vision, I think, for our product, which is I always want to empower designers. I still really believe in sending our designers to Europe and to Australia to trend shop. Mm-hmm. I really believe in that. How do we listen to the customer to iterate, I think, is where the product design really goes forward. When you get down to solutions, though, it really is the basis. We want to own the weather whether that weather is for swimsuits in the summer or for outerwear in the winter, it's also everything in between. So it's a great raincoat, it's a great fleece. We want to provide solutions across that, but then we bring solutions to our uniform business, right? That's why Delta's come back to us, right? Because we can bring them solutions that other people cannot bring, and a quality that other providers in the uniform space can't. So solutions is still a very big part of that. I mentioned right when we were coming on stage that I was in Berlin yesterday. We went and shopped around, including DKNY, and I walked in there, and we were looking at Canada Goose. We started talking to the person who was there, and she's like, "Oh, where do you guys work?" We're like, "Oh, we're all with Lands' End." And she said to us, she's like, "You know what's funny?" She's like, "Your guys' jackets are probably just as good as, if not better than these. And it's just like, okay. Right? First off, in Europe we're about a fifth of the size as we are in the U.S., but to hear that from somebody working on the floor, that's probably the most important part of our entire business. Opportunity. Yeah. Tell us about WHP and what that means. Yeah. I was on the phone with WHP this morning. I think everybody's familiar with the transaction that happened with WHP, where we now have two different businesses. We have the operations company, which Bernie and I work at, and we have the IPCO, which Bernie and I are 50% shareholders in, if you want to think about it that way. They are really driving the expansion of Lands' End, both geographically and vertically. We work with them on a daily basis. We're launching, for example, into luggage licensing, we're launching into, for example, the pet licensing. I think, if I had to say what they've been doing since the transaction, we've really stabilized the existing licensing relationships we had, and now it's about how we get more aggressive expanding the brand. To me, the thing I love about the relationship is it's the classic rising tide lifting all boats, because the stronger we make landsend.com and we make our Lands' End stores, the better it's going to be for them when they go out and try to expand it. I do not know if you had anything to add to it, but I've been thrilled with how we work together. No, I think you covered it, especially the geographic expansion. I think that they can bring an expertise and relationships that already exist that we would've had to build. I think that they'll be able to expand more quickly than we could in that area. As we continue to work with them as partners, there's going to be additional integrations that we can do where our OPCO can support them while they're driving the IPCO. We're very excited about it. I think the other thing that sometimes gets lost in the wash is that we're very interested in WHP's success because we actually have a, if you want to call it a warrant or a leverageability, that if they do a transaction, we benefit also. I'll give a fun behind-the-scenes and too early to commit to, but one of the conversations I had this morning was Effie over at WHP, he asked me, he's like, "Hey, what would you think of a Lands' End Kids pop-up shop inside Toys R Us? That's a classic example where their scale can give us activations, and frankly, that's really kind of all them because they run the Kids license. But the fact that he called me and wanted to make sure that we thought it was brand appropriate, I think is a real testament to the sort of the relationship that we're building. Well, you have a lot of strength and reach, and look at the different channels or the line items, whether it's the Outfitters business, international, e-commerce. What do you think of each, and also health of the consumer? Okay. Yeah, fun. So I was like, "This is an easy crowd." No, it's not easy at all. Here we go. One of the things that's worth noting is I started July 13th, and I think when you start at Lands' End on July 13th, you immediately start to make two lists in your head, and the first list is what can you influence for holiday and the second list is what can you not. The reason I bring that up is it meant I really just initially focused on consumer. I focused on landsend.com because I basically had missed the back to school peak that really drives uniforms. Right. We really started getting after landsend.com and also Lands' End Europe, as well as our third-party business. We just closed a Prime Day that we're really proud of. That's been the focus predominantly on our marketing engine, both the CRM side and the performance marketing side, and wherever we can do conversion rate optimization on sites. That's where the majority of our efforts have gone there. That said, I went to my first ever airline uniform conference. How did you like it? It was riveting stuff. in all sincerity- You want to get more uniforms in all sincerity- Yeah The coolest thing was I went up to the Southwest booth. Okay. Southwest is not a client. Opportunity. I had an hour-long conversation with their lead flight attendant and learned this stuff really matters to them. If you think about what it is like to be a flight attendant, you live in whatever your uniform is. Right. I learned more in that hour than I think I've ever learned about a business. Do you have a meeting with Southwest? We sure do. Okay, good. But the other thing I will tell you is the buying cycles are crazy. How long? It's like two to three years. Oh, my. Well, you got to start sometime. You got to start sometime. So that's a good example of just learning that business and learning the opportunity there because that Outfitters business is this very weird amalgamation of huge clients and lots of medium clients, and lots and lots of small clients. The strategy there has been a lot of fun. Health of consumer, we've been really happy, and one of the things Bernie actually said earlier today was we've been very fortunate that we've had this loyal customer base for a long time that usually can weather any sort of near-term consumer storms. I don't know, would anything on the health side? I think we've been largely encouraged. Yeah, I think as Ian talked about earlier, with Vera, is that we have an older consumer, we have a wealthier consumer, and a very loyal consumer. So while that's a huge positive, especially during some difficult times, it defines that we will carry through. With that, we have the challenge of going to get that new consumer that's going to follow through, and it was said very well earlier, and we believe this and talk about it every day, we can't disenfranchise that loyal customer, and we're going to love her and make sure that she's taken care of while we build this engine that can drive a new consumer to our business. We're so far so good. The median age of our core customer is 61, but the median age of our new to file is down to 47. So I think, what's the dream number? It's probably around 40. That'd be the dream. But that balance that Bernie just described is something that I probably say way too much around the office is that, look, we have got to keep her happy and it's got to excite her. Right. You have to walk and chew gum at the same time. I was actually walking up here from the office, and I had received a letter from this gentleman named Richard, who was complimenting a woman in our consumer team named Amy. I call him because he left his phone number. I called him to say thank you, and he was the classic median customer. He's like, "I shop from you guys five times a year." He's like, "It means so much to me, and it shows me that you actually care about customer service." But I wish I would've recorded it Right because it was the perfect median customer, and I would broadcast it from around the room. One of the things that we've been talking about with brands is legacy modernizing. Yeah. That legacy brands are modernizing. That's what you guys are doing because we've seen it with some of the collaborations with the tote bags and all. What do you think of where you are in that cycle of legacy modernizing? Oh my gosh. I think from a product perspective, we're relatively far along. Okay. I think we have a good product selection that allows us to speak to customers. The thing is, when we talk about this AI engine or whatever you want to call it, you have the luxury of not saying the same thing to every person. I think that modernization layer, we're kind of in the early, early innings. I think as we talk about, we have the right assembly of products, but how we now reach people is where you're going to see, I think, the biggest acceleration. Yeah, I think you'd have to add to that where we are mature is having the personalization capabilities that we have. That's a great point. Because of the uniform business, we have a very advanced embroidery operation, and supports the school uniforms amazingly, and our small business. But where it really leans in and you see it, most of our new customers come in through the tote, and the ability to embroider that tote and do it with your friends and stuff, it just carries a lot of weight, especially with that younger new customer. As you put the holistic picture together, Bernie, the balance sheet is improved, debt. What do you see as the puts and takes? I think when you start thinking about our relationship, IPCO and OPCO, we have the IP that we want to drive, and that's being driven by truly just revenue. The OPCO is about us becoming an elite execution business. The ability to then, this frees us up to have many different discussions. As Charlie gets us and gets rid of our tech debt, and we move on to being a true best-in-class operator, we now will have the ability to go and have other brands, either operate for other brands, or we'll have the firepower to go buy brands and start bringing them within this organization that we're building. That elite operations, to combine with your last question around legacy modernization. To give you another very real example, if anybody in this room is not familiar with how Meta and Google have changed their algorithms, if you read about the Andromeda algorithm, for example, it's basically put a premium on creative, right? It's no longer about saying, "Target this person, target this person." It's about, "Give us assets that we can use that are compelling. Because Meta gets paid on the click. Right. Google gets paid on the click. When I joined, Lands' End had never done what is called a partnership ad. A partnership ad is, it is not Lands' End talking about Lands' End, it is literally from your Instagram account. It is a very common advertising technique. On July 13th, we had zero assets. This month we will have 300. That is a good example of building a muscle that you need to win in the modern economy. I am really pleased with how we are modernizing, but we certainly got a ways to go. Bernie referenced sort of the tech debt. Go back to my holiday list versus next year's list. Yeah. A lot of the stuff that we want to do is going to wait till next year just because we have to modernize the platform first. Mm-hmm. One of the other things always with Lands' End is customer acquisition, new customer growth. Sounds like there could be an acceleration with that? We're getting there. We've seen positive momentum last quarter, positive momentum so far this quarter, and I think, go back to that 61 versus 48, the reality is we have a huge responsibility to kind of maintain our core. Then we have to grow over here. Right. But the core is so large that if we can get new customer acquisition into the mid-teens, mid-20s year-over-year, that's really, really exciting. But we can't take the eye off the ball with the core. No. I think when I talk about that concierge program, that's a perfect example of just sort of insulating that base. Then we can take that, and it'll also make the LTV of all these new people higher as well. It really is kind of those two chess boards. Yeah. And the modernizing of the platform. We need to be able to give them the experience they want Right when they do come. I think the real lift comes when we get there next year. One of the things, we had breakfast a month or so ago. One of the things we were talking about modernizing is, it sounds like on the tech side, you brought in some people you used to work with. Yeah. That will be an enhancer. Yeah. So we brought in a gentleman by the name of Jimi Ferolo. I have to tell you, I've known Jim for 12 years. He recently rebranded to Jimmy, and it's actually kind of adorable/sad as to why. It's because that's what his mom always called him, and his mom passed away, and so he started going by Jimmy. But I've called him Jim for 12 years, so I keep slipping up. Jim was the Chief Digital Officer at Maui Jim. He's not Maui Jim. It's a coincidence. But he and I spoke at a conference together 12 years ago, and every once in a while you kind of interact, and it'll probably happen to you at this conference. You're like, "I just kind of want to know what this person's up to every couple of months. Right. And we would just say, "What are you working on? What am I working on?" And then when I came in and I knew we needed a digital technology leader, I put three candidates from my past in front of Kelly Ritchie, our head of HR, and a couple of people interviewed all three of them, and all of them came back and would be like, "You'd be an idiot to not hire Jimmy. He's already pushing us. The fact that we were able to get that pilot live on email concierge, he's in like week four. I think we get really excited. But Bernie, you've seen a lot of- Yeah tech leaders come through. I think your comments is almost equally important. Yeah. We couldn't be more excited from a standpoint of how much he's taking on and how quickly he is putting things in place that structure and correct some of the past ills that we have created. He's been a huge support for us, and we're really excited for what's next. He's brought in some leaders from his past. Oh. We're really The up-leveling of talent in the digital and tech organization is massive. Yeah. The other thing during that breakfast that came out as the real opportunities, you mentioned just the depth and the amount, the opportunity with the data that you have. Oh my gosh. That is what surprised you. Well, AI is powered by data. Right. Right? We have probably sent, I don't know, Bernie, over a billion catalogs, probably over two billion catalogs. We should probably do the math. Yeah. It's- We'll do that for you. It's just a massive number. All of those catalogs have physical addresses and names. You probably also have some sort of transaction record tied to it. All of this stuff, it's the lifeblood of a modern day AI-driven personalization program. It's not an exaggeration to say we have a truly unfair advantage. I will say we referenced tech debt. Ashwini, in our data team, has actually done a great job of creating a really good customer data platform. That's going to be really the fuel that drives all of these fun personalization initiatives we'll be doing. We've talked about WHP, talked a little about the AI, the data enhancement, the opportunities. You've mentioned some of the things that you're working on now to move forward. We're sitting here a year from now, what are we going to be talking about? I'm going to give a really basic answer. I think what we'll be talking about is everybody Lands' End will be cool, right? And we will have people talking about us. And the thing that's crazy about Lands' End, and this is going to sound somewhat romantic, I really get the sense that everybody wants us to win. Yeah. There's a real affinity for the brand. As we do these things, when you talk about AI-driven marketing, when you talk about personalization on the website, the manifestation of it is the brand is just out there more. More people are talking about this. Yes, it'll manifest itself in KPIs, like new customer acquisition will be up, right? Yeah. That's huge for us. It'll manifest itself in hopefully our median age is coming down a little bit, but I just want to get the chatter going, right. When you get 300 creators talking about a brand that have never talked about a brand before, that's just the ball starting to roll downhill. I would just love it if, right now I think if you talk to a bunch of people and you go on the street, right, we go right out there to the library and say, "Hey, what do you think about Lands' End?" They're like, "Oh, yeah, Lands' End, I remember them." A year from now, they'll be like, "Oh, Lands' End's awesome. Right. That's what I would love to have for a year from now. I know it's a little bit of a basic answer, but then you can say all the finance stuff. I'll take the simple one. I'll keep it very simple from a standpoint of all the new customers we get in the next year. Yep have bought a second and third time. That's a really great answer. There you go. Repeat. Repeat. We love repeat. Yeah, we love repeat. That's an excellent thing. We've always been good at it. Lands' End is kind of built on repeat. Isn't your wardrobe changed now? Oh, yeah. I'm rocking Lands' End. I am a T-shirt and jeans guy, as I think every time, when you met, I was wearing a T-shirt and jeans. Yes, you were. Mm-hmm. Yeah. I know I'm biased. I have shopped for the best men's T-shirt for 10 years. It's ours. Our Supima Tee is so good. I basically live in Lands' End T-shirts, and then I wear Lands' End jeans. It's really nice to work for a company that has really good products. Mm-hmm. Well, next year you're going to show us what new you've added to your wardrobe from Lands' End. Okay. I'll take the challenge. You're going to bring the most popular tote bag. It'll be a new black T-shirt. What? It'll be a new black T-shirt, but that's fine. Oh, of course. Not a problem. Hopefully it will be a size smaller. We look forward to continuing to see the path to product at Lands' End. Thank you so much for joining us today. Thanks, Dana. Thanks. Thank you.