Conference Transcript - LE 2026-10-08

Operator

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 Land's End. I'm thrilled to have with us today the CEO of Land's End, Charlie Cole, who's newer, and basically after leading digital and e-commerce companies through customer engagement and brand transformation, we'll hear what he has to say about the opportunities for Land's End, While also having with us Bernie McCracken, the CFO of Land's End, who's been there for nearly 12 years now in total and knows all the ins and outs. So in getting started, Charlie, tell us your background a little bit and your vision for Land's End.

Charlie Cole, CEO

So 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. And that's really what I've 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 Toomey, Samsonite, Lucky Brand. But, you know, 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's the real vision for LandZen because we have an unfair advantage of 60 years of data because we're not just a brand. We're a direct consumer brand and a catalog brand. So that data really is something that if you can unleash it using technology, it's going to be a fun ride. And so that's the vision. I think Lanzen has to be the most progressive digital company in the world. And I know that sounds a little bit highfalutin, but I can promise you that's sort of where we're trying to take the business.

Operator

So you've also referred it to you have the opportunity to be a modern AI engine.

Charlie Cole, CEO

Yeah.

Operator

With all your data that you have.

Charlie Cole, CEO

Yes.

Operator

Genders, preferences.

Charlie Cole, CEO

What does it look like? so if you think about there's this buzzword in e-commerce that's been overused for a decade and this concept of personalization and 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. So imagine a world where you have multiple sets of data, both customer data of like your past purchase history, browsing behavior, email, open, send, click, whatever it might be. And then we basically say, okay, these are the five promotions that you can use. So 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. And then you basically just say, go. And 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. 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.

Operator

Color black. That's my color.

Charlie Cole, CEO

I walked into that one. But that's sort of like now 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 data than it is for Bernie. All that stuff now is readily possible if you have the correct engine behind your business. And so that's really what we're looking to build. And we're in the process of building. But 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 land zone experience. And so for us to pull that off in my first like two and a half months, I'm pretty stoked about it.

Operator

Also, Land's End has been known as a product solutions company.

Charlie Cole, CEO

Yeah.

Operator

How do you see product advancement going forward?

Charlie Cole, CEO

Well, so 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 messing something. And 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. And 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 Carl, that's a perfect Carl Lagerfeld quote. And so 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 kind of the AI engine i'm talking about so that's really the vision i think for our product which is i always want to empower designers um i still really believe in sending our designers to europe and to australia to like trend shop right i really believe in that but then 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 you know whether that weather is for swimsuits in the summer or for outerwear in the winter but it's also everything in between so it's a great raincoat it's a great fleece so 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 inequality that other providers in the uniform space can't so solutions is still a very big part of that I was I mentioned right when we were coming on stage that I was in Berlin yesterday we went and shopped around including the KDV and I walked in there and we were kind of looking at Canada goose and we started talking to the person who was kind of there and she's like oh where do you guys work she's like we're like oh we're all with plans end and she said to us she's like you know it's funny it's like your guys jackets are probably just as good as if not better than these and it's just like okay right like first off in Europe we're about a fifth of the size as we are in the US but to hear that from somebody working on the floor I mean that's that's probably the most The most important part of our entire business.

Operator

Tell us about WHP and what that means.

Charlie Cole, CEO

I was on the phone with WHP this morning. I think everybody is 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 IP company, which Bernie and I are 50% shareholders in, if you want to think about it that way. They are really driving the expansion of land's end, both geographically and vertically. so we work with them on a daily basis we're launching for example in the luggage licensing we're launching into example the pet licensing and I think you know 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 and and to me the thing I love about the relationship is it's the classic rising tide lifting all boats because the stronger we make lands end comm and we make our lands end stores the the better it's gonna be for them when they go out and try to expand it. And so, I don't know if you had anything to add to it, but I've been thrilled with how we work together.

Bernie McCracken, CFO

No, I think you covered, especially the geographic expansion. I think that they can bring an expertise and relationships that already exist that we would have had to build. So I think that they'll be able to expand more quickly than we could in that area. And then, 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. So we're very excited about it. I think the other thing that sometimes gets lost in the wash is that there's a, 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 do a transaction, we benefit also.

Charlie Cole, CEO

I'll give a fun behind the scenes and too early to commit to, but one of the conversations we had this morning was Effie over at WPHP asked me, he's like, hey, what would you think of a Land's End kids pop-up shop and shop inside Toys R Us? And so that's a classic example where their scale can give us kind of activations. And frankly, that's really kind of all of 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 sort of the relationship that we're building.

Operator

Well, you have a lot of strength and reach, and look at the different channels or the line items, whether it's the outfitter's business, international, e-commerce, where are you, what do you think of each, and also health of the consumer.

Charlie Cole, CEO

Okay, yeah, fun. So I was like, this is an easy quote, no, it's not an easy quote. So 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 and so the reason i bring that up is it meant i really just initially focused on consumer i focused on lands on.com because i basically had missed the back to school peak that really drives uniforms right so we really started getting after lands end.com and also lands and europe as well as our third Party business. We just closed the prime day that We're really proud of. And so 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. And that's where the majority of our efforts have gone there. That said, i did, i went to my first ever airline uniform conference.

Operator

How did you like it?

Charlie Cole, CEO

It was riveting stuff.

Operator

But you want to get more uniforms.

Charlie Cole, CEO

In all sincerity. yeah it was the coolest thing was i went up to the southwest booth okay and southwest is not a client opportunity and i i had an hour-long conversation with their lead flight attendant and learned this stuff really matters to them like if you think about what it is like to be a flight attendant you live in whatever your uniform is right and and so i learned more in that hour than i think i've ever learned about a business so do you have a meeting with southwest we sure do okay good and And so, but the other thing I will tell you is the buying cycles are crazy.

Operator

How long?

Charlie Cole, CEO

It's like two to three years.

Operator

Well, you've got to start sometime.

Charlie Cole, CEO

You've got to start sometime. But so that's a good example of just kind of 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. And so the strategy there is going to be a lot of fun.

Bernie McCracken, CFO

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 kind of weather any sort of near-term consumer storms but i don't know would be anything on the health side i think we've been largely encouraged yeah i think as ian talked about earlier um with vera is that you know 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 really 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 and it was said very well earlier and we believe

Charlie Cole, CEO

this and talk about it every day we can't disenfranchise that loyal customer and we're gonna love her and make sure that she's taken care of while we build this engine that can drive a new consumer and our business and we're so far so good i mean the the median age of our core customer is 61 but the median age of our new to file is down to 47 and so i think you know what's the dream number it's probably around 40. like that'd be like the dream but that balance that bernie just described is something that i probably say way too much around the office is that like look we have got to keep her happy and it's got to excite her right and so you have to walk into them 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 called named amy and i call him because he left his phone number i called him to say thank you and he was like the classic medium 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 have recorded it because it was like the perfect medium customer i would broadcast it from around the room so 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 so 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 and 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 early innings so i think as we talk about we have the right assemble of like 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 because of the uniform business we have a very advanced embroidery operation and supports the

Bernie McCracken, CFO

school uniforms amazingly and our small business up where it really leans in and you see it most of our new customers coming through the tote and the ability to 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 if you put the holistic picture together Bernie the balance sheet is improved that what do you see is the puts and takes I think when you start thinking about our relationship ipco and opco so we have the 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 and 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 and that elite operations and combined with your last question around legacy modernization to give you another very real example if anybody in this room is not familiar with kind of how meta and google have changed their algorithms if you read about the andromeda algorithm for example

Charlie Cole, CEO

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. Google gets paid on the click. And so when I joined, Land's End had never done what's called a partnership ad. And so a partnership ad is it's not Land's End talking about Land's End. It's literally from your Instagram account. So it's a very common advertising technique. So on July 13th, we had zero assets. this month we'll have 300 and so that's a good example of building a muscle that you need to win in the modern economy and so I'm really pleased with how we're modernizing but we certainly got a ways to go and and Bernie reference sort of the tech that go back to my holiday list versus next year's list a lot of the stuff that we want to do is gonna wait till next year just because we have to modernize the platform first one of the other things always with lens ends is Customer acquisition, new customer growth.

Operator

Sounds like there could be an acceleration with that.

Charlie Cole, CEO

We're getting there. We've seen positive momentum last quarter, positive momentum so far this quarter, and I think, you know, go back to that, you know, 61 versus 48. The reality is we have a huge responsibility to kind of maintain our core, and then we have to grow over here. But the core is so large that we really kind of, if we can get new customer acquisition into like the mid-teens, mid-twenties year over year that's really really exciting but we can't take the eye off the ball of court and so i think when i talk about that concierge program that's a perfect example of just sort of insulating that base and then we can take that and it also make the ltv of all these new people higher as well and so it really is kind of what that that chess those two chess boards and the modernizing of the platform we want we need to be able to give them the experience they want when they do come so that I think the real lift comes when we when we get there next year and then one of the things so we had breakfast a month or so ago one of the things you're talking about modernizing is it sounds like on the tech side you brought in some people you used to work with that'll be an enhancer yeah so we brought him a gentleman named Jimmy Parolo so I have to tell you I've known Jim for 12 years so I just did it he recently like rebranded to Jimmy and it's actually kind of adorable slash sad as to why because that's what his mom always called him and his mom passed away and so he started going by jimmy so 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 um 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 and we would just say like what are you working on what am i working on and then when i came in and i knew we needed like a digital technology leader i put three candidates from my past in front of kelly richie our head of hr and a couple people interviewed all three of them and all of them came back and be like you'd be an idiot to not hire jimmy and so he's already pushing us i mean the fact that we were able to get that pilot live on email concierge he's in like week four and so i think we get really excited i mean but bernie you've seen a lot of Tech leaders come through. I think your comments is equally important.

Bernie McCracken, CFO

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. But he's Been a huge support for us. We're really excited for what's next.

Charlie Cole, CEO

The up-leveling of talent in the digital and tech organization is massive yeah and the other thing during that breakfast that came out is the real opportunities you mentioned just this the depth and the mount the opportunity with the data that you have that's what surprised you it well I mean AI is powered by data right right and so we have probably sent I don't know Bernie over a billion catalogs probably over 2 billion we We should probably do the math. It's just a massive number. All of those catalogs have physical addresses and names. And it has, you probably also have some sort of transaction record tied to it. And so all of this stuff just, it's the lifeblood of a modern-day AI-driven personalization program. And so it's not exaggeration. We have a truly unfair advantage. And so, and I will say, we Reference tech debt. Ashwini and our data team has actually We've done a great job of creating a really good customer data platform. So that's going to be really the fuel that drives all of these fun personalization initiatives we'll be doing.

Operator

So we've talked about WHP, talked a little about the AI, the data enhancement of the opportunities. You've mentioned some of the things that you're working on now to move forward. So we're sitting here a year from now. What are we going to be talking about?

Charlie Cole, CEO

So I'm going to give a really basic answer. I think what we'll be talking about is everybody, like, Land's End will be cool, right? And we will have people talking about us. And the thing that's crazy about Land's End, and this is going to sound somewhat romantic, I really get the sense that everybody wants us to win. There's a real affinity for the brand. And so 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 and more people are talking about this and yes it'll manifest itself in kpis like new customer acquisition will be out right that's huge for us it'll manifest itself like hopefully our median age is coming down a little bit but i just want to get the chatter going right and so when you get 300 creators talking about a brand that have never talked about a brand before that's just The ball is starting to roll downhill. And so 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, like, hey, what do you Think about lancet? they're like, oh, yeah, lancet i Remember them. A year from now they'll be like, oh, lancet Is awesome. That's what i would love to have For a year from now. I know it's a little bit of a Basic answer. And then you can say all the Finance stuff.

Bernie McCracken, CFO

I'll take the simple one.

Charlie Cole, CEO

I'll keep it very simple from a standpoint of all the new Customers we get in the next year have bought a second third time that's a really great there you go repeat we love repeat yeah we love repeat that's an excellent thing and we've always been good at it and this is kind of built on repeat isn't your wardrobe change now oh yeah okay so i'm i'm rocking lens that's okay i am a t-shirt and jeans guy like as i think every time when you met i was wearing a t-shirt yes you are yeah and uh i 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 and so like I basically live in lands on t-shirts and then I you know we're

Operator

lands on jeans and so it's really nice to work for product a company that has really good products well next year you're gonna show us what new you've added to your wardrobe from lands and okay you're gonna bring it you're gonna bring the most popular black t-shirt but that it'll be a new black t-shirt but that's not a problem hopefully it'll be a size small and we look forward to continuing to see the path of product at Lens End. Thank you so much for joining us today.