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Sears, Roebuck & Co. is said to be quietly shopping around its Lands’ End business, and the asking price is $1.2 billion, well below the $1.9 billion in cash the retailer paid for the famous catalogue company in 2002.
Financial sources in the mergers and acquisitions community said presentations have been made to a few select firms and individuals.
The list is surprising at first glance, but makes sense on further examination.
Those said to be eyeing Lands’ End include Texas Pacific Group, which is the majority stakeholder of red-hot specialty retailer J. Crew, and David Dyer, president and chief executive officer of Tommy Hilfiger Corp., according to bankers and one financial analyst in New York, who requested anonymity.
Dyer was formerly president and ceo at Lands’ End and was also executive vice president and general merchandise manager of Sears’ direct customer business before taking the top slot at Hilfiger. Prior to joining Lands’ End, Dyer was an independent catalogue-retail consultant for TPG and J. Crew from 1997 to 1998.
Dyer said “no comment” when reached by WWD on Monday. TPG could not be reached for comment.
The timing of a sale of Lands’ End is favorable. Sears and Kmart Holdings Inc. are in the middle of an $11 billion merger deal, which goes to a shareholder vote on March 24, and they may be looking to shed some assets. Meanwhile, the market remains flush with cash as buyers scurry to snap up well-known brands.
A Sears spokesman said that Lands’ End is not for sale. He then added, “Lands’ End is a cornerstone brand for Sears. One of the attractive elements of the merger [with Kmart] is the opportunity to have proprietary brands under one roof, whether it is Lands’ End, Martha Stewart, Craftsman, Kenmore or Joe Boxer. And keep in mind, we don’t comment on rumors in the marketplace.”
The Kmart-Sears deal, which is really an acquisition of Sears by Kmart that results in a new company called Sears Holdings Corp., is expected to close by the end of this month after shareholders in the two companies vote.