For Once
Sears Holdings said on Tuesday that it was considering splitting off its Lands' End and Sears Auto Center businesses from the rest of the company so it could better focus on its Sears and Kmart stores.
'We believe separating the management of these two businesses from Sears Holdings would allow them to pursue their own strategic opportunities, optimize their capital structures, attract talent, and allocate capital in a more focused manner while bringing our business unit structure to life outside of the Sears Holdings portfolio,' the company said in a statement.
The company said that any separation of Lands' End would not be structured as a sale but through a transaction that would allow existing shareholders to benefit from long-term increase in value. It added that it was exploring strategic alternatives for the Sears Auto Centers, which the company has been repositioning around services not related to tires, whose margins have been compressed over the last several years.
Sears Holdings, which is controlled by Edward Lampert, the hedge fund manager who has grappled with reviving the company for years, also said that it would continue to evaluate all of its stores, including leased locations that are set to expire, and decide whether to renew them or not.
The announcement came as Sears also provided an update on its third-quarter performance. Comparable store sales, which exclude new stores, dropped 3.7 percent in the 12 weeks through Oct. 26, with a 4.8 percent decline for domestic Sears stores and a 2.6 percent drop for Kmart stores.
The company cited the 'challenging overall economic and highly competitive environment' and higher costs of a reward program.
Finally, Sears Canada announced it was selling five store leases to the Cadillac Fairview Corporation for $400 million Canadian dollars, or $383 million.
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