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Sears holding to operate Lands' End clothing, auto center businesses separately

RBR Staff Writer Published 31 October 2013

Struggling US retailer Sears is considering to separate its Lands' End clothing and auto center businesses to improve financial flexibility and accelerate its transformation into a leading integrated retailer.

The company believes that separating the management of these two businesses would allow it to pursue strategic opportunities, optimization of capital structures, and allocation of capital in a more focused manner while bringing its business unit structure to life outside of the company portfolio.

The company said it will continue to evaluate its stores in the context of its Integrated Retail strategy. It will review each location, including leased locations that are set to expire, and decide whether or not to renew such leases.

Sears also intends to close unprofitable stores, and redeploy the capital tied up in those locations, while sharpening its focus around existing Sears and Kmart stores that have higher levels of profitability.

Further, Sears Canada announced the sale of five store leases to Cadillac Fairview Corporation Limited for total consideration of $400m. The transaction is expected to close in the next ten business days.

Sears, led by hedge fund manager Edward Lampert, has sold some Canadian real estate assets for $383m recently.

Sears Holding chairman and chief executive officer Edward Lampert said, "The current market value of our 51% interest in Sears Canada is over $675m. We believe that the maximization of value of our stake in Sears Canada will improve our financial position and our ability to execute on our strategic transformation."