Lands’ End on its Own as of April 4

Ex-Sears subsidiary will begin public trading the following Monday
Posted March 18, 2014

An SEC filing by Sears Holdings Corp. (Hoffman Estates, Ill.) says it will spin off its Lands’ End subsidiary on Friday, April 4, 2014.

The newly independent apparel brand will begin trading on the NASDAQ Stock Market on Monday, April 7. Its valuation as a standalone company has been speculated at about $400 million by some analysts.

The Chicago Tribune reports that Lands' End will enter into a lease agreement for the roughly 250 retail locations inside Sears stores, paying Sears about $27 million in total annual rent. The lease obligation will drop to $10.9 million for 102 of those Sears locations by 2019, according to the filing.

Dodgeville, Wis.-based Lands' End, which was acquired by Sears for $1.9 billion in 2002 – before the 2005 Sears merger with Kmart Corp. (Troy, Mich.) – will pay Sears a cash dividend of $500 million before the spinoff, financed by a new term loan. Lands' End may also borrow up to $175 million for working capital.

Lands' End revenue was $1.56 billion in fiscal 2013, about 82 percent of that coming from e-commerce and catalog sales.

In recent years, the financially struggling Sears has spun off Orchard Supply Hardware and Sears Hometown and Outlet stores, among other assets.