That’s what some analysts and The New York Post report, and Goldman Sachs has supposedly been chosen to assist in the sale.
Although a spokesperson for Sears Holdings declined comment on “speculation and rumor,” Lands’ End may be up for sale: asking price about $2 billion.
Lands’ End, which markets itself as a “family destination” mostly through mail order and e-commerce, has gotten the short shrift in a company that’s been struggling with 19 straight quarters of sales declines and a $2.4 billion loss in the most recent fourth quarter alone.
While Lands’End had grown during the 1990s, the brand’s sales have been estimated to be flat in recent years, generating between $150 million and $200 million in gross earnings.
At one time, Sears attempted to sell Lands’ End merchandise in its stores as a means to attract a younger, more affluent consumer, but the effort failed.
License Land’s End Internationally Like Tommy Hilfiger?
Since Land’s End is such a different retail type than Sears Holdings’ other divisions, it seems the most likely to be sold. According to the Post, Lampert would like to find a buyer who would then license Land’s End to search while expanding the brand internationally, such as in Europe.
“The idea is that Lands’ End would become something like Tommy Hilfiger,” a source told the Post.
Sears originally acquired Lands’ End in May 2002 for $1.86 billion in cash, a price that many observers said was too high at the time. Lampert inherited it when he merged Sears with Kmart in 2005. Lampert now controls about 61% of Sears Holdings through his ESL Investments, a private equity fund.
Speculation among retail analysts is that Sears may only be able to get between $1.2 billion and $1.6 billion for Lands’End.
In recent weeks, Sears Holdings has been looking for ways to turnaround its business, which posted a $3.1 billion loss last year. Last month, the company said it planned to increase liquidity by about $1 billion and improve operating performance, including reduction in expenses, lowering inventories, as well as sale and spin-off stores.
Sears Holdings then agreed to sell 11 Sears full-line store locations to mall operator General Growth Properties, Inc. (GGP) for $270 million. The company also planed to spin-off about 1,250 of its smaller-format stores to enable it to focus on its core business, and raise nearly $400 million to $500 million in proceeds.
Sears has since cut a deal to sell three of its top stores in Canada for $170 million.