SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________________
FORM 11-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the year ended December 31, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ..... to .....
Commission file number 1-9769
A. Full title of the Plan and the address of the Plan, if different from
that of the issuer named below:
LANDS' END, INC. RETIREMENT PLAN
B. Name of issuer of the securities held pursuant to the Plan and the
address of its principal executive officer:
LANDS' END, INC.
LANDS END LANE
DODGEVILLE, WI 53595
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed by the undersigned thereunto duly authorized.
LANDS' END, INC. RETIREMENT PLAN
By /s/ DONALD R. HUGHES
Donald R. Hughes
Vice President-Finance
Date: June 25, 1999
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 11-K into the previously filed Lands' End,
Inc. Form S-8 Registration Statement (No. 33-63461) for the Lands' End, Inc.
Retirement Plan.
By /s/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP
Milwaukee, Wisconsin,
June 25, 1999
LANDS' END, INC.
RETIREMENT PLAN
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
LANDS' END, INC.
RETIREMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets Available for Plan Benefits, with Fund
Information as of December 31, 1998 and 1997
Statements of Changes in Net Assets Available for Plan Benefits, with
Fund Information, for the Years Ended December 31, 1998 and 1997
NOTES TO FINANCIAL STATEMENTS
SCHEDULES SUPPORTING FINANCIAL STATEMENTS
Schedule I: Item 27(a)-Schedule of Assets Held for Investment
Purposes as of December 31, 1998
Schedule II: Item 27(d)-Schedule of Reportable Transactions for the
Year Ended December 31, 1998
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the
Lands' End, Inc. Retirement Plan:
We have audited the accompanying statements of net assets available for plan
benefits, with fund information, of Lands' End, Inc. Retirement Plan (the
"Plan") as of December 31, 1998 and 1997 and the related statements of
changes in net assets available for plan benefits, with fund information, for
the years then ended, as listed in the accompanying table of contents. These
financial statements and the supplemental schedules referred to below are the
responsibility of the plan administrator. Our responsibility is to express
an opinion on these financial statements and the supplemental schedules based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1998 and 1997, and the changes in its net assets available
for plan benefits, with fund information, for the years then ended, in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, as listed
in the accompanying table of contents, are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for plan benefits and the statements of
changes in net assets available for plan benefits is presented for purposes
of additional analysis rather than to present the net assets available for
plan benefits and changes in net assets available for plan benefits of each
fund. The supplemental schedules and fund information have been subjected to
the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
By /s/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP
Milwaukee, Wisconsin,
May, 21, 1999
<TABLE>
LANDS' END, INC.
RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
Fund Information
----------------------------------------------------------
<CAPTION>
Lands' End, Partic-
Cash Fixed Inc. ipants'
(In thousands) Equiva- Income Balanced Equity Stock Loan
lents Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENTS,
at fair value:
American Express Trust
U.S. Government
Securities Fund II $2,695 $ - $ - $ - $ - $ - $ 2,695
IDS Federal Income
Fund, Inc. - 13,285 - - - - 13,285
IDS Mutual Fund - - 22,870 - - - 22,870
American Express Trust
Equity Index Fund I - - - 6,930 - - 6,930
IDS New Dimensions
Fund, Inc. - - - 63,830 - - 63,830
Templeton Foreign Fund - - - 1,315 - - 1,315
Lands' End, Inc.
Stock Fund - - - - 745 - 745
Total Investments 2,695 13,285 22,870 72,075 745 - 111,670
LOANS TO PARTICIPANTS - - - - - 2,445 2,445
EMPLOYER CONTRIBUTION
RECEIVABLE 54 413 423 1,211 71 - 2,172
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $2,749 $13,698 $23,293 $73,286 $ 816 $2,445 $116,287
<FN>
The accompanying notes to financial statements are an integral part of this statement.
</FN>
</TABLE>
<TABLE>
LANDS' END, INC.
RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
Fund Information
----------------------------------------------------------
<CAPTION>
Lands' End, Partic-
Cash Fixed Inc. ipants'
(In thousands) Equiva- Income Balanced Equity Stock Loan
lents Fund Fund Funds Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENTS,
at fair value:
American Express Trust
U.S. Government
Securities Fund II $ 625 $ - $ - $ - $ - $ - $ 625
IDS Federal Income
Fund, Inc. - 10,478 - - - - 10,478
IDS Mutual Fund - - 20,434 - - - 20,434
American Express Trust
Equity Index Fund I - - - 3,037 - - 3,037
IDS New Dimensions
Fund, Inc. - - - 47,102 - - 47,102
Templeton Foreign Fund - - - 1,398 - - 1,398
Lands' End, Inc.
Stock Fund - - - - 443 - 443
Total Investments 625 10,478 20,434 51,537 443 - 83,517
LOANS TO PARTICIPANTS - - - - - 1,574 1,574
EMPLOYER CONTRIBUTION
RECEIVABLE 78 769 895 2,217 107 - 4,066
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $ 703 $11,247 $21,329 $53,754 $ 550 $1,574 $89,157
<FN>
The accompanying notes to financial statements are an integral part of this statement.
</FN>
</TABLE>
<TABLE>
LANDS' END, INC.
RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
Fund Information
----------------------------------------------------------
<CAPTION>
Cash Fixed Lands' End, Partic-
Equiva- Income Balanced Equity Inc. ipants'
lents Fund Fund Fund Stock Fund Loan Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
(In thousands)
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income-
Net (depreciation)
appreciation in fair
value of investments $ - $ (56) $(1,200) $11,050 $(109) $ - $ 9,685
Interest and dividend income 71 865 3,132 3,950 4 - 8,022
Total investment income 71 809 1,932 15,000 (105) - 17,707
Contributions-
Employer contributions-
Matching 45 309 571 1,570 85 - 2,580
Profit sharing 54 413 423 1,211 71 - 2,172
Participants' contributions 119 758 1,503 4,430 259 - 7,069
Rollovers 20 177 110 289 - - 596
Total contributions 238 1,657 2,607 7,500 415 - 12,417
Total additions 309 2,466 4,539 22,500 310 - 30,124
BENEFITS PAID TO PARTICIPANTS (35) (487) (788) (1,582) (15) (87) (2,994)
FUND TRANSFERS 1,779 615 (1,555) (816) (23) - -
LOANS ISSUED TO PARTICIPANTS (9) (208) (333) (853) (16) 1,419 -
LOAN PRINCIPAL REPAYMENTS 2 65 101 283 10 (461) -
NET INCREASE 2,046 2,451 1,964 19,532 266 871 27,130
NET ASSETS AVAILABLE
FOR PLAN BENEFITS:
Beginning of year 703 11,247 21,329 53,754 550 1,574 89,157
End of year $2,749 $13,698 $23,293 $73,286 $ 816 $2,445 $116,287
<FN>
The accompanying notes to financial statements are an integral part of these statements.
</FN>
</TABLE>
<TABLE>
LANDS' END, INC.
RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
Fund Information
-------------------------------------------------------
<CAPTION>
Cash Fixed Lands' End, Partic-
Equiva- Income Balanced Equity Inc. ipants'
lents Fund Fund Funds Stock Fund Loan Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
(In thousands)
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income-
Net appreciation in fair
value of investments $ - $ 158 $ 208 $ 5,738 $ 82 $ - $ 6,186
Interest and dividend income 26 620 2,950 3,739 2 - 7,337
Total investment income 26 778 3,158 9,477 84 - 13,523
Contributions-
Employer contributions-
Matching 30 316 560 1,295 49 - 2,250
Profit sharing 78 769 895 2,217 107 - 4,066
Participants' contributions 85 776 1,456 3,498 140 - 5,955
Rollovers 30 9 60 538 - - 637
Total contributions 223 1,870 2,971 7,548 296 - 12,908
Total additions 249 2,648 6,129 17,025 380 - 26,431
BENEFITS PAID TO PARTICIPANTS (13) (346) (616) (887) (8) (11) (1,881)
FUND TRANSFERS (77) (681) (871) 1,632 (3) - -
LOANS ISSUED TO PARTICIPANTS (1) (96) (142) (455) (2) 696 -
LOAN PRINCIPAL REPAYMENTS 2 32 48 161 4 (247) -
NET INCREASE 160 1,557 4,548 17,476 371 438 24,550
NET ASSETS AVAILABLE
FOR PLAN BENEFITS:
Beginning of year 543 9,690 16,781 36,278 179 1,136 64,607
End of year $703 $11,247 $21,329 $53,754 $ 550 $1,574 $89,157
<FN>
The accompanying notes to financial statements are an integral part of these statements.
</FN>
</TABLE>
LANDS' END, INC.
RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
(1) Description of the Plan-
The following description of the Lands' End, Inc. Retirement Plan (the
"Plan") is provided for general information purposes only. More
complete information regarding the Plan's provisions may be found in the
plan document.
The Plan is a defined contribution plan and covers substantially all
employees of Lands' End, Inc. (the "Company") who are at least 19 years
of age as of the end of the Plan year and have completed both six months
and 1,000 hours of eligible service. The Plan is sponsored and
administered by the Company. The Plan is governed by the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
Participants contribute to the Plan through salary reductions in amounts
not exceeding 15 percent of participants' eligible compensation. Each
participant's account is credited with the participant's voluntary
contributions, the allocation of the Company contributions and Plan
earnings in accordance with the Plan agreement. The Plan provides for
employer matching and profit sharing contributions. Matching
contributions are made in amounts equal to 50 percent of participant
contributions, limited to three percent of participants' eligible
compensation. Profit sharing contributions are made at the discretion
of the Company's Board of Directors and are allocated to each
participant's account based on his or her eligible compensation level
(subject to certain Internal Revenue Service limits) in relation to all
participants' compensation. Participants are fully vested in
participant and employer contributions at all times.
Participants have the ability to self-direct their funds. The following
are descriptions of the funds:
American Express Trust U.S. Government Securities Fund II is invested
in U.S. Government and U.S. Agency securities and seeks to provide
maximum current income consistent with liquidity and conservation of
capital.
IDS Federal Income Fund, Inc. is an income fund. This fund is managed
to help protect the participants' money from loss, while seeking a
consistent rate of return.
IDS Mutual Fund is a balanced growth and income fund. This fund
focuses on securities of medium to large, well-established companies
that offer long-term capital appreciation and consistent income from
dividends and interest.
American Express Trust Equity Index Fund I is an equity fund. This
fund is invested primarily in common stocks of the Standard & Poor's
(S&P) 500 Stock Index to achieve a rate of return as close as possible
to the S&P 500 Index.
IDS New Dimensions Fund, Inc. is an equity growth fund. Funds in this
group seek capital growth, primarily from common stocks. Income is
not an investment objective.
Templeton Foreign Fund is an international equity growth fund. This
fund seeks long-term capital growth through a flexible policy of
investing primarily in stocks of companies located outside the United
States.
Lands' End, Inc. Stock Fund is a Company stock fund. This fund seeks
long-term capital growth from Lands' End, Inc. common stock and money
market investments. Income is not an investment objective.
(2) Summary of Significant Accounting Policies-
Basis of Accounting-
The financial statements have been prepared on the accrual basis of
accounting.
Investments-
Investments are stated at fair market value as determined by the
custodian by reference to published market data. Participant loans are
stated at unpaid principal value.
Net Appreciation (Depreciation) in Fair Market Value of Investments-
Net realized and unrealized appreciation (depreciation) is recorded in
the accompanying statements of changes in net assets available for plan
benefits, with fund information, as net appreciation (depreciation) in
fair market value of investments.
Administrative Expenses-
All administrative expenses for the Plan were paid by the Company,
except certain mutual fund expenses that were netted against
participants' investment yield.
Accounting Estimates-
The preparation of financial statements required the use of certain
estimates by management in determining the Plan's assets, revenues and
expenses. Actual results could differ those estimates.
(3) Funding Policy-
The Company's contributions to the Plan represent matching and profit
sharing contributions. Matching contributions are deposited at
specified intervals throughout the year. The employer contribution
receivable as of December 31, 1998 and 1997, represents the accrued
profit sharing contribution for the applicable year.
(4) Loans to Participants-
A participant may borrow the lesser of $50,000 or 50% of his or her
vested account balance with a minimum loan of $1,000. Loans are
repayable through payroll deductions over periods ranging up to 120
months. The interest rate is determined by the Plan administrator based
on prevailing market conditions and is fixed over the term of the note.
Interest rates ranged from 7.0% to 11.0% during both 1998 and 1997.
(5) Benefits Paid to Participants-
Benefits paid to participants represent the amounts paid to participants
who have terminated employment. The form of payment is a lump-sum
distribution. Amounts currently payable to terminated participants
included in net assets available for plan benefits as of December 31,
1998 and 1997, was $53,713 and $86,684, respectively.
(6) Income Tax Status-
The Plan has obtained a determination letter from the Internal Revenue
Service dated May 16, 1994, approving the Plan as qualified for tax-
exempt status. Plan amendments adopted since the last tax determination
letter will be included in the Company's next filing. The Company's
management believes the Plan remains tax-exempt.
(7) Related Party Transactions-
The Plan periodically invests in common funds managed by the current
custodian, American Express Trust Company. Also, the Plan invests in
the Company's common stock. These transactions are not considered
prohibited transactions by statutory exemption under ERISA regulations.
(8) Plan Termination-
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
(9) Reconciliation to Form 5500-
The difference between net assets and benefits paid in both the
financial statements and the Plan's Form 5500 is due to benefit claims
payable to terminated participants. This difference as of December 31
is summarized as follows:
1998 1997
Net assets per Form 5500 $116,233,395 $ 89,069,994
Benefit claims payable 53,713 86,684
Net Assets per Statement of Net
Assets Available for Plan
Benefits $116,287,108 $ 89,156,678
Benefits paid to participants per
Form 5500 $ 2,960,789 $ 1,864,636
Change in benefit claims payable 32,971 15,525
Benefits paid to participants per
Statement of Changes in Net Assets
Available for Plan Benefits $ 2,993,760 $ 1,880,161
SCHEDULE I
EI No. 36-2512786
Plan No. 001
LANDS' END, INC.
RETIREMENT PLAN
ITEM 27(a)-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
Description Cost Fair Value
American Express Trust U.S. Government
Securities Fund II (*) $ 2,694,724 $ 2,694,724
IDS Federal Income Fund, Inc. (*) 13,317,063 13,285,138
IDS Mutual Fund (*) 23,342,542 22,870,241
American Express Trust Equity
Index Fund I (*) 5,541,899 6,930,206
IDS New Dimensions Fund, Inc. (*) 42,930,790 63,830,368
Templeton Foreign Fund 1,591,699 1,314,479
Lands' End, Inc. Stock Fund (*) 743,978 744,480
Total Investments $90,162,695 $111,669,636
Loan to Participants (interest rates
ranging from 7.0% - 11.0%) (*) $ 2,444,753 $ 2,444,753
(*) Represents a party in interest
The accompanying notes to financial statements are an integral part of this
schedule.
<TABLE>
Schedule II
EI No. 36-2512786
Plan No. 001
LANDS' END, INC.
RETIREMENT PLAN
ITEM 27(D) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<CAPTION>
Current Value
Identity of Description of Purchase Selling Cost of of Asset on Net Gain
Party Involved Asset Price Price Asset Transaction Date or (Loss)
<S> <C> <C> <C> <C> <C> <C>
CATEGORY 1 - SINGLE TRANSACTION EXCEEDS 5% OF VALUE
***NO TRANSACTIONS QUALIFIED FOR THIS SECTION***
CATEGORY 2 - SERIES OF TRANSACTIONS WITH SAME BROKER EXCEEDS 5% OF VALUE
***NO TRANSACTIONS QUALIFIED FOR THIS SECTION***
CATEGORY 3 - SERIES OF TRANSACTIONS IN SAME SECURITY EXCEEDS 5% OF VALUE
Plan Trade IDS Federal Income $ 5,324,401 ---------- $ 5,324,401 $ 5,324,401 ----------
IDS Federal Income ----------- $7,790,030 $ 7,764,834 $ 7,790,026 $ 25,198
Plan Trade IDS Mutual $ 7,078,465 ---------- $ 7,078,465 $ 7,078,465 ----------
IDS Mutual ----------- $3,438,990 $ 3,233,146 $ 3,438,980 $ 205,844
Plan Trade IDS New Dimensions $13,998,239 ---------- $13,998,239 $13,998,239 ----------
IDS New Dimensions ----------- $7,327,960 $ 4,801,690 $ 7,327,972 $2,526,270
Plan Trade US Gov't Sec. II $ 5,233,964 ---------- $ 5,233,964 $ 5,233,964 ----------
US Gov't Sec. II ----------- $3,127,457 $ 3,172,457 $ 3,172,457 ----------
<FN>
The accompanying notes to financial statements are an integral part of this schedule.
</FN>
</TABLE>
