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Sears considering to pursue a spinoff of Lands' End

Oct. 30, 2013 @ 12:00 AM

NEW YORK -- Sears, which runs 2,500 Kmart and Sears stores, is considering separating its Lands' End catalog business and Sears Auto Center businesses from the rest of the company.

The retailer also plans to continue closing some of its unprofitable stores and is selling some store leases in Canada. The announcements came Tuesday as Sears warned that it expects a loss of $582 million in the third quarter on another drop in sales. The company said for the 12 weeks that ended Saturday its sales at stores open at least a year fell 3.7 percent.

Sears said that it likely will pursue a spinoff of Lands' End, which it bought in 2002, to shareholders and not an outright sale. "We believe that Lands' End is an iconic brand with the potential to become a more global brand," said a Sears statement.

Sears also said it's repositioning Sears Auto Center around services other than tires and is evaluating strategic options for the business. Additionally, Sears anticipates closing unprofitable stores, including locations whose leases will expire soon.

In addition, Sears Canada is selling five store leases to Cadillac Fairview Corp. for 400 million Canadian dollars. ($383.5 million). The deal is expected to close in the next 10 business days.

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