Sears to spin off Lands’ End clothing business
HOFFMAN ESTATES, Ill. — Sears Holdings Corp. said Friday that it will spin off its Lands’ End clothing business as a separate company by distributing stock to the retailer’s shareholders.
It’s the latest move by the struggling retailer to turn around its results as it faces wider losses and increasingly displeased investors.
Sears 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.
Belus Capital Advisors analyst Brian Sozzi said the move shows Sears was unable to get a buyer at the right price for Land’s End and may raise questions about how much other well-known brand names Sears owns, like Craftsman, are worth.
“It makes you question the value of what Sears is sitting on,” he said. “It may have to continue dismembering itself to stay alive today and shrink from inside out. “
Sears has spun off other businesses over the past two years, including its Hometown and Sears Outlet stores and its Orchard Supply Hardware 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 percent 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.