Sears, Roebuck and Co. today announced its deal to buy Lands' End Inc. for about $1.86 billion.
The transaction has been approved by both boards and is expected to be finalized in June. A report stated that Lands' End, with $1.6 billion in revenue last year, will continue to offer its product line through its catalogs and online, and will become a wholly owned subsidiary of Sears remaining in Dodgeville, WI.
Sears will offer $62 per Lands' End share, which closed at $51.02 Friday. In early trading today, Lands' End stock skyrocketed 21 percent to $61.72 just after 10 a.m. Eastern time. Sears will assume an unspecified amount of debt.
Reuters reported that this ends “years of speculation” regarding talks of a merger between the companies as Lands' End considered opening its own stores while Sears is overhauling its clothing unit, which has underperformed compared with its appliance and tool business.
Sears shares fell 43 cents just after 10 a.m. today after closing at $51.81 Friday.
“I think this is one of the smartest moves that could have been made,” Kurt Barnard, president of Barnard's Retail Consulting Group, told Reuters. “It will give Lands' End enormous distribution, and it will greatly enhance Sears' apparel business. Lands' End is a household name.”
Sears, Hoffman Estates, IL, reportedly will place some Lands' End products in many of its 870 stores by autumn and is expected to complete product rollout to stores by fall 2003. Sears will carry an assortment of Lands' End clothing along with footwear, home fashions and accessories.
David Dyer, Lands' End CEO, will continue to lead the Lands' End business and will report to Sears CEO Alan Lacy after the deal closes. Dyer will assume responsibility for Sears' existing customer-direct business, which includes sears.com, catalogs and specialty merchandise.