Sears reportedly looking to sell Lands’ End
Sears, Roebuck and Co. wants to throw in the towel in its bid to grow its softlines business with Lands’ End, according to published reports that Sears is looking for a buyer for its popular apparel brand. Insiders say the move should be good for Lands’ End, which they say never quite suited the demographics of Sears customers.
“Lands’ End was doing very well on its own before Sears, but it just didn’t work out with Sears,” says Ulysses Yannas, a stock analyst who follows Sears at New York investment firm Buckman, Buckman & Reid. In addition to Lands’ End’s apparel being an odd match for the hardlines sold in Sears stores, it also failed to appeal to the lower-income demographics of average Sears customers—a difference that would have become even more of a problem after Sears’ pending merger with Kmart, which caters to even lower average incomes, Yannas says. “If Lands’ End can’t work at Sears, how can it work at Kmart?” he says.
A Sears spokesman declines to comment on published reports regarding a sale of Lands’ End, noting that Sears has a policy of not responding to rumors. Yannas and other industry experts, however, say a sale of Lands’ End has been expected since Sears and Kmart Corp. announced plans in November to merge under a deal that calls for Kmart to pay Sears $11 billion. He and others say that likely acquirers of Lands` End include private equity firms, and that some apparel manufacturers have also expressed interest.
Yannas adds that Sears hasn’t shown any real benefits from its acquisition of Lands’ End, for which it paid $1.9 billion in 2002. At the time, Sears executives pointed to Lands’ End’s expertise in e-commerce as well as its strong apparel brand as the value the Dodgeville, WI-based apparel merchant would bring to Hoffman Estates, IL-based Sears. “I don’t think they picked up anything,” Yannas says. “The softer side of Sears hasn’t been doing well under Lands’ End either.”
Another industry insider who asked to remain anonymous, however, says that Sears should realize lasting benefits from its association with Lands` End, including new skills in presenting additional products online and in coordinating online and offline merchandising plans.
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