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Sears to buy Lands' End

Sears today announced plans to boost its apparel business by acquiring Lands’ End, the top-selling specialty apparel retailer known for its catalogue and Internet sales.

The $1.9 billion all-cash transaction, which is expected to close in June, will enable Sears to sell Lands’ End apparel in its 870 full-line stores.

"The transaction could bring a breath of fresh air to Sears’ apparel operations," notes Filippe Goossens, a retail analyst with Credit Suisse First Boston, in a written report on the deal.

Sears recently rolled out its own line of family apparel called Covington, but Goossens believes the Lands’ End merchandise will do much more to boost sales.

Merrill Lynch analysts Daniel Barry and David Lichtman, in a report on the deal, note that it could give Sears’ apparel business the strong brand-name recognition the retailer now enjoys with hardline brands such as Diehard, Kenmore and Craftsman.

Key Lands' End items will appear in Sears stores by the 2002 holiday season with a full rollout into 15-20% of existing apparel space by fall 2003.

Sears announced it will carry an assortment of Lands’ End apparel for men, women and children and a selection of footwear, accessories and home fashions. Lands’ End will continue to sell goods through its catalogue and online channels. It is among the country’s largest specialty apparel Internet and catalogue companies, with annual revenue in 2001 of about $1.6 billion.

Sears says it will finance the deal through up to $1.6 billion of asset-backed long-term financing.

-- Staff and wire reports

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