According to Sears, separating the management of Lands’ End would allow the business to pursue its own strategic opportunities, optimize its capital structure, attract talent, and allocate capital in a more focused manner.
A Benefit to Shareholders?
“We believe that Lands’ End is an iconic brand with the potential to become a more global brand, and we presently anticipate that any separation, if pursued, would not be structured as a sale but rather through a transaction that would allow existing shareholders the opportunity to benefit from the significant potential for value creation over the long term,” the company noted.
The move is part of a wider plan to improve the company’s financial flexibility and accelerate its transformation into a leading integrated retailer, including possibly separating its Sears Auto Center business.
The company will also close unprofitable stores, which could include leased locations that are due to expire. It plans to redeploy the capital from those stores and focus on its existing Sears and Kmart stores.
Sears Canada, meanwhile, is selling five store leases to Cadillac Fairview Corporation for $400 million Canadian dollars (about $383.2 million) in a deal that is expected to close in the next 10 business days.
During the third quarter, Sears Holdings saw comparable store sales fall 3.7% for the 12 weeks to Oct. 26, with a 4.8% decline at Sears Domestic stores, and a 2.6% for Kmart stores.