May 13, 2002
Sears is buying direct merchant Lands' End for $1.86 billion, a move that marries one of the largest retailers to one of the most admired. Sears hopes the move rejuvenates its sagging apparel business. For Lands' End, it provides an immediate entree to bricks-and-mortar retailing.
"We were considering the prospect of opening stores ourselves or seeking a strategic partner, and ultimately decided that our alliance with Sears offered the most exciting opportunity," Lands' End CEO David Dyer said.
Lands' End clothing will start showing up in Sears' 870 stores this fall, with footwear and home fashions to follow. Lands' End will continue to operate its catalog and online operations. Additionally, Dyer will be in charge of Sears direct marketing divisions, including sears.com.
Sears CEO Alan Lacy has been trying to refashion Sears as a "destination for nationally recognized brands" and to accelerate the growth of its direct-marketing operations. Last October he jettisoned Sears' previous strategy of emphasizing low prices as the chain continued to lose business to such leading discounters as Wal-Mart and Target.
At one point, analysts thought Sears was preparing to abandon the apparel business entirely and focusing on home goods and appliances. But Sears determined that the cost of radically refashioning its stores would be too high.
