Sears Holdings Corp. will spin off its Lands’ End business on April 4 and give Sears shareholders 0.3 shares of the company for every Sears share they own.
Distributions will be made to Sears shareholders of record at 5:30 p.m. EDT on Monday. Fractional shares in the company will be aggregated and sold to the public with the proceeds from those sales distributed proportionately to the holders of the fractional shares not converted to Lands’ End stock.
Sears had 106.2 million common shares outstanding at the close of the 2013-14 fiscal year on Jan. 31, which would put the initial share count for Lands’ End at just under 32 million.
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Sears’ predecessor company, Sears, Roebuck & Co., bought Lands’ End for $1.9 billion in cash in 2002 in a move that both recalled its roots as a direct marketer and sought to lay the foundation for its future in better branded apparel. Those efforts have met with only a modicum of success. In the year ended Jan. 31, Lands’ End sales slid 1.5 percent to $1.56 billion from $1.59 billion in 2012, while net income grew 58 percent to $79 million from $50 million. Sales in 2001, Lands’ End’s last year as a publicly held firm prior to the Sears acquisition, were $1.57 billion.
Lands’ End remains highly focused on phone and online orders, which accounted for 82 percent of sales in 2012. Sales inside Sears stores make up 16 percent of revenues with 2 percent coming from freestanding stores.
Holders of restricted stock in Sears that isn’t yet vested will receive cash awards in lieu of Lands’ End shares, with the cash subject to vesting requirements. Sears will continue to be traded on the Nasdaq under the ticker symbol “SHLD” following the spin-off, while Lands’ End’s ticker will trade under the ticker “LE.”
With the pro rata distribution of shares, Sears chairman and chief executive officer Edward S. Lampert will be the largest Lands’ End shareholder, with approximately 48.4 percent of the stock.
Sears shares Monday closed at $44.84, up 83 cents or 1.9 percent.