New York -- Sears Holdings Corp. said its board has approved the spin on of its Lands’ End business, effective April 4, according to a filing with the U.S. Securities and Exchange Commission.
The agreement, which was announced in December, will make Lands' End an independent company that will trade on the Nasdaq under the symbol “LE.”
Sears stockholders on record as of March 24 will receive about 0.3 shares of Lands' End common stock for each share of Sears they own.
Lands' End will pay a $500 million dividend to Sears before the spin-off financed by a new senior secured term loan. Lands' End may also borrow up to $175 million for working capital through an asset-based senior secured revolving credit facility, Sears said.
Sears purchased Lands’ End in 2002 for $1.9 billion in 2002. The company generates most of its sales through e-commerce and catalogs, and also operates some 290 retail outlets, primarily inside Sears stores. As part of the spinoff, Lands' End will enter into a lease agreement, initially paying Sears about $27 million in total annual rent for its in-store locations. The lease obligation will drop to $10.9 million for 102 Sears locations by 2019, according to the filing.
Lands’ End is the latest Sears’ business unit to be shed off by the struggling retailer. In 2012, Sears spun off its Sears Hometown and Outlet division and, in 2011, it spun off its Orchard Supply Hardware Stores business.