Saturday
October
25
2014
1:44 am
Weather

  Home
  Local News
  State / National / World
  Sports
  Opinion / Letters
  Business
  Arts / Entertainment
  Lifestyle
  Obituaries
  Calendar
  Submit Event
  Comics / Games
  Classifieds
  DJ Designers
  Archives
  Advertise With Us
  About Us
 
 
 
 

Check out our archive of Dining Guides - Yum!

Sears considering spinning off Lands’ End
October 30, 2013, 05:00 AM The Associated Press

NEW YORK — It’s like watching an old friend slowly fall apart.

Sears was once the place where families could go for an afternoon of one-stop shopping for everything from clothing to appliances to car parts. But it has struggled in recent years amid declining sales and stiff competition.

Now, 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 that for the 12 weeks that ended Saturday its sales at stores open at least a year fell 3.7 percent.

On the news, Sears shares rose $5.66, or more than 10 percent, to $61.22 midday.

“(Sears) equity remains a melting ice cube, with asset sales and spinoffs the clearest path to justifying the share price,” noted Greg Melich, an analyst at International Strategy & Investment Group LLC in a report published on Tuesday.

The news underscores the intense pressure facing billionaire hedge fund manager and chairman Eddie Lampert, who took over as CEO in February to turn around the business. The storied retailer hasn’t adapted as bigger, nimbler rivals such as Wal-Mart and Home Depot have stolen 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 percent of its sales and has tens of millions of active customers.

But critics say Sears hasn’t managed to solve its core problem: Its stores aren’t inviting to shoppers. “The stores are horrifically out of date,” said Brian Sozzi, CEO and Chief Equities Strategist at Belus Capital Advisors. “The shopping experience is depressing.”

Still, the latest moves don’t address the shopping experience, and are more in keeping with Sears’ turnaround strategy of getting rid of assets and closing stores.

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.

———————————

Follow Anne D’Innocenzio at www.Twitter.com/adinnocenzio

 

 

Tags: sears, stores, sales, business, million, selling,


Other stories from today:

 

 
Print this Page Print this Page  |  Bookmark and Share
<< Back
 
Return To Archives
 
  


 
 
 
Daily Journal Quick Poll
 
What is the most important issue facing the United States right now?

Ebola
Islamic State
Income gap
Russia/Ukraine
Immigration
Health care
The economy

 

 
 
 
 
 
 
Iraqi officials say IS militants used chlorine gas
BAGHDAD — Islamic State militants used chlorine gas during fighting with security forces and Shiit..
Ford profit falls in third quarter on truck costs
DEARBORN, Mich. — Ford's new aluminum-sided F-150 will be a lot lighter and more efficient when it..
Federal officials: Dallas nurse free of Ebola
WASHINGTON — The first nurse diagnosed with Ebola after treating an infected man at a Dallas hospi..
After 1st Ebola case in NYC, 3 others quarantined
NEW YORK — Officials tried to tamp down New Yorkers' fears Friday after a doctor was diagnosed wit..
More >>  
 
 
  
 
  
 
©2014 San Mateo Daily Journal
San Mateo County election results