Sears Holdings to Spin Off Lands’ End on April 4

In Reports, What's New, Industry News by Jeff Prine

Lands' EndHoffman Estates, IL—Lands’ End got a step closer to being an independent, publicly-traded company on Friday after the board of directors at Sears Holdings Corp., its parent, approved the spin off on April 4.

The deal, which was announced last December, will create Land’s End as a separate company (publicly traded on NASDAQ as “LE”) and Sears will receive a cash dividend of $500 million before the spin off, financed by a new term loan. Lands’ End also will be able to borrow up to $175 million for working capital, according to financial filings.

Links to Sears Remain Though

Sears stockholders on record as of March 24 will receive about 0.3 shares of Lands’ End common stock for each share of Sears they own.

Lands’ End, which Sears bought for $1.9 billion in 2002, is the latest asset of Sears Holdings to be spun off under Sears’ plan to return to profitability. Already Sears spun off its Orchard Supply Hardware Stores in 2011 and its Sears Hometown and Outlet business in 2012.

Lands’ End reported about $1.56 billion in sales for fiscal year 2013. Net income rose to $79.9 million for the year, up from $49.8 million in 2012. About 82% of Lands’ End sales come from its e-commerce and catalog business.

And while Lands’ End will be independent it still will retain links to Sears, where it has some 253 shops in Sears’ stores, falling to 102 by 2019. Lands’ End customers will continue to be a part of Shop Your Way, Sears’ and Kmart’s customer loyalty program.

Lands’ End also will rely on Sears for core operational functions including retail sales staffing, distribution and purchasing.



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