Sears ponders Lands’ End spinoff

Sears is considering separating its Lands’ End and Sears Auto Center businesses from the rest of the company as it seeks to bolster its business at its Sears and Kmart stores.

 
The retailer also plans to continue closing some of its unprofitable stores as it moves ahead on its turnaround efforts.

The moves come as Sears Holdings Corp., led by hedge fund billionaire Eddie Lampert, announced another quarter of declining sales.

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

Sears said that it would likely pursue a spinoff of Lands’ End and not a sale. Lands’ End, a catalog retailer, is based in Dodgeville, Wis.

Sears also said it has started repositioning Sears Auto Center around services other than tires and is evaluating strategic options for the business.

Sears anticipates closing unprofitable stores, including those locations whose leases are set to expire soon. The retailer said that it would take the capital from the unprofitable locations and redeploy it elsewhere.

The Hoffman Estates, Ill., retailer also announced that its third-quarter sales at stores open at least a year fell 3.7 percent. The figure dropped 4.8 percent for Sears locations and declined 2.6 percent for Kmart stores.

Sears has nearly 2,500 stores in the United States and Canada.

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