Sears considering spinning off Lands' End - MyFoxAustin.com | KTBC Fox 7 | News, Weather, Sports

Sears considering spinning off Lands' End

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CHICAGO (FOX 32 News) -

The parent company of Sears and Kmart revealed Tuesday that it will lose more than a half-billion dollars in the third quarter, as sales continue to decline. But the locally-based retailer's stock price jumped more than 11 percent, after it said it may spin off to stockholders one of its corporate gems: The Lands' End brand.

Business analysts said the stock price rose because investors believe the man who controls the troubled retailer, hedge fund manager Eddie Lampert, is now moving to sell off Sears Holdings piece by piece. He has repeatedly denied that's his plan, but spinning off the Lands' End brand and Sears' popular Auto Care centers would deprive the struggling retail giant of two major attractions.

A quick look at the Sears on State Street leaves no doubt about what the Lands' End brand means here. It's not only featured in most of the show windows, it's the first thing visitors see when they enter the store, along with holiday decorations that may have some thinking the Christmas shopping season is already here. But if a separate Lands' End store opening next month in the Western Suburbs at Yorktown Mall represents the future, then what's ahead for Sears stores like this one?

"It does beg the larger question of whether or not Sears will continue to be a going concern in five, seven, 10 years," says Bridget Sweeney, a reporter for Crain's Chicago Business.

The company has spent big trying to cater to the clothing tastes of younger shoppers; offering, among many others, the Kardashian Kollection, from the sisters who are famous for being famous. Nonetheless, the company said Tuesday, total sales declined 4.8% over the last year at Sears brand stores and dropped 2.6% at Kmart brand stores.

"Apparel has long been Sears' Achilles heel. They've been trying and trying and trying to get the whole ‘Softer Side of Sears' right for a long time, always with limited success," Sweeney explains. "They introduced all these different lines, you know, lines attached to all these different celebrities' names. None of them seemed to sell that well. The Kardashian line has been pretty well ravaged by critics, some people just saying its ugly."

Sears Holdings said there were bright spots, including the growth of its "Shop Your Way" membership club. Those loyal shoppers now account for fully 65% of all Sears sales.

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