In yet another troubling sign for the survival of the historic retailer, Sears Holdings announced it will spin off the Lands’ End clothing business on April 4, just five months after floating the idea. The deal, which was announced in December, will turn Lands’ End into a stand-alone, publicly-traded company.
Sears has been spinning off businesses and selling assets during the past few years. The company’s Hometown, Sears Outlet, and Orchard Supply Hardware stores were previously sold to raise cash.
Lands’ End, which sells clothing and home goods, was launched in 1963 as a sailboat hardware and equipment catalog, but later emerged as a clothing company by 1977. Sears has owned the brand since 2002 and most of its 253 retail outlets are located inside Sears stores. As part of the spinoff, Lands’ End will enter into a lease agreement, initially paying Sears about $27 million in total annual rent for those locations. The lease obligation will drop to $10.9 million for 102 Sears locations by 2019, according to the filing.
Sears said in October that it was considering separating the Lands’ End and Sears Auto Center businesses from the rest of the company to raise cash amid dwindling sales. Sears said its fourth-quarter losses were $358 million compared with $489 million last year. Total sales fell 13.6 percent to $10.59 billion hurt by lower same-store sales and fewer Kmart and Sears full-line stores in operation. U.S. same-store sales slid by 7.8 percent at Sears.