Thursday, April 24, 2014
Investors Ignore the Benefits of the Lands End Spinoff. Here's Why You Shouldn't
The recent negative reaction to the Lands' End (NASDAQ: LE ) spin-off from Sears Holdings Corporation (NASDAQ: SHLD ) has unfolded similarly to traditional spin-offs in the past. The market continues to focus on the past results of Lands' End to justify its current valuation while at the same time it has overly focused on the company's connection to Sears Holdings.
Lands' End is a specialty retailer that mainly focuses on web and catalog sales. Sears bought the company back in 2002 for $1.9 billion in cash. Over the years Sears started placing Lands' End stores within its department stores, but this hasn't helped stop the recent slides in revenue for either retailer.
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Disclosure: Long LE and SHLD. Please read the disclaimer page for details.