Lands’ End Exploring ‘Strategic Alternatives’ Including Possible Sale
Lands’ End Inc. has put up the “for sale” sign.
On Friday, the company disclosed it has begun a process to explore strategic alternatives, including a sale, merger or similar transaction to maximize shareholder value.
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“Lands’ End is a classic American lifestyle brand — and the company’s strategy and execution have delivered significant operational and financial improvements,” said Josephine Linden, chair of the board, in a statement Friday morning. “While we remain confident in the company’s potential for future value creation, the board also believes that the market is undervaluing this great company and its upside potential.
“As a result, in consultation with the board’s legal and financial advisers, we have determined it is an appropriate time to explore strategic alternatives to maximize shareholder value,” Linden said. “We are committed to conducting a rigorous process to best serve the interests of all Lands’ End shareholders.”
That boosted Lands’ End stock price 9 percent, or $1, to $12.22, at the opening of the stock market Friday.
The decision by the board appears to be a response to pressure exerted by billionaire investor Edward “Eddie” Lampert, the majority shareholder, who last month sent a letter to the board advocating for a sale. Lampert owns approximately 17 million shares of the company, giving him a stake of more than 53.3 percent.
Lands’ End was bought by Sears in 2002, which was then merged with Kmart in a mega merger orchestrated by Lampert. But as the retail giant struggled, Lands’ End was spun off as a stand-alone company in 2014 while the combined Sears and Kmart went bankrupt in 2018 and virtually disappeared.
The Lands’ End board said that no assurances can be given as to the outcome or timing of the board’s process.
Perella Weinberg Partners is serving as Lands’ End’s financial adviser and Wachtell, Lipton, Rosen & Katz is the company’s legal adviser.
The Dodgeville, Wisc.-based Lands’ End is scheduled to report its fourth-quarter and year-end results on March 20.
In the third quarter, the company showed improved profitability through its continued focus on product innovation, customer acquisition and reducing price promotions.
The brand narrowed its net loss to $600,000 in the quarter ended Nov. 1, from a net loss of $112.4 million a year earlier, when results were hit by a noncash goodwill impairment charge of $106.7 million resulting from a decline in the company’s stock price.
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