Monday, February 3, 2014

Sears to spin off Lands’ End business

HOFFMAN ESTATES, Ill. (AP) — Sears Holdings said Friday that it will spin off its Lands' End clothing business as a separate company by distributing stock to the retailer's shareholders.

The retailer 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 in Friday's announcement.

Sears has spun off other businesses, including its Hometown and Sears Outlet 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% as investors pulled money out of his hedge fund.

The news underscores the intense pressure facing the billionaire hedge fund manager, who took over as CEO in February to turn around the business.

Sears and the company's Kmart chain have struggled as rivals have lured away customers over the years.

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.

Sears also has been building a loyalty program called Shop Your Way, which accounts for 65% of its sales and has tens of millions of active customers.

Sears bought Lands' End, which sells clothing and home goods on the Internet and through catalogs, in 2002.

Sears shares finished at $49.98 per share on Thursday. They are up almost 21% so far this year.

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