Sears Announces Its Separation from Lands’ End

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lands-end-sign-300Sears Holdings Corp. announced its separation from its Lands’ End  clothing business, according to a press release. Lands’ End Inc., filed a registration statement with the Securities and Exchange Commission, Dec. 6.

The spin off is subject to approval by the Board of Directors of Sears Holdings.  At any time until the spin-off, Sears can decide to abandon the spin-off or modify or change the terms of the spin-off, according to the press release.

Sears Holdings Corp. said in October, it was considering separating Lands’ End and Sears Auto Center from the rest of the company.

Separating Lands’ End and Sears Auto Center would allow them to pursue their own strategic opportunities, optimize their capital structures, attract talent and allocate capital in a more focused manner while bringing the business unit life outside of the Sears Holdings Portfolio.

According to Reuters, the company which operates Sears department stores and Kmart discount store has been selling or spinning off assets and closing stores for past few years in an effort to turn around its business.  Sales have dropped since Eddie Lampert, chief executive officer, combined Sears and Kmart in an $11 billion deal in 2005.

Reuters reported that Sears is losing market share to Wal-Mart and Target and is facing increased competition from online retailers.

Sears spun off its Orchard Supply Hardware stores in 2011 and its Sears Hometown and Outlet business last year, according to Reuters. In October, the company sold some Canadian real estate assets for $383 million, according to Reuters.

Lands’ End, which originated as a catalog business, was bought by Sears in 2002 and generated sales of $1.59 billion in 2012, according to Reuters. This was down from $1.73 billion in 2011.  Sears’ sales fell to $39.85 billion from $41.57 billion, according to Reuters.

According to Reuters, the Lands’ End brand started to lose some of its cachet when it began to be sold in Sears stores. About 16% of the brand’s sales came from Lands’ End shops located in Sears stores in 2012.