Sears will spin off Lands’ End
Struggling retailer will distribute new firm’s stock to shareholders
12/7/2013HOFFMAN ESTATES, Ill. — Sears Holdings Corp. said Friday that it will spin off its Lands’ End clothing business as a separate company by distributing stock to the retailer’s shareholders.
It’s the latest move by the struggling retailer to turn around its results as it faces wider losses and increasingly displeased investors.
Sears had said in October that it was considering separating the Lands’ End and Sears Auto Center businesses from the rest of the company. It did not mention Sears Auto Center on Friday.
Lands’ End, which sells clothing and home goods on the Internet and through catalogs, began in 1963 as a sailboat hardware and equipment catalog, but it morphed into a clothing company by 1977. Sears purchased the company in 2002.
Sears shares slipped 3.8 percent to $48.09 Friday.
Belus Capital Advisors analyst Brian Sozzi said the move shows Sears was unable to get a buyer at the right price for Lands’ End and may raise questions about how much other brand names Sears owns, like Craftsman, are worth.
“It makes you question the value of what Sears is sitting on,” he said.
Sears has spun off other businesses over the last two years, including its Hometown and Sears Outlet stores and its Orchard Supply Hardware Stores, to raise cash.
Sears Chairman and CEO Edward Lampert disclosed recently that his stake in the company has been reduced to less than 50 percent as investors pulled money out of his hedge fund.
The news underscores the pressure facing the billionaire hedge fund manager, who took over as CEO in February.
Last year, Sears announced plans to restore profitability by cutting costs, reducing inventory, selling off some assets, and spinning off others. Those moves helped it reduce net debt by $400 million and generated $1.8 billion in cash from the asset sales in the latest fiscal year.