Lands’ End is up for sale, a Business Week story said.
According to that report, Land’s End founder and chairman, Gary Comer, so far has not been able to find a buyer for the 38-year-old catalog and Internet retailer, based in Dodgeville, WI.
The report, citing unnamed sources, also claimed that over the last year, three companies, Sears, Roebuck and Co., Wal-Mart Stores Inc., and May Department Stores Co., explored the possibility of acquiring the company, but never made any actual offers.
“We do not comment on rumors,” Beverly Holmes, Lands’ End spokesperson, said.
Officials at Sears, Wal-Mart and May Department stores would not comment on their reported interest in buying Land’s End. German mail order company Otto Versand, which owns Spiegel and Eddie Bauer, is also a potential suiter, reports speculate.
“Reports of Land’s End being up for sale are not new,” Derek Leckow, a financial analyst with Chicago-based Barrington Research, told DIRECT Newsline.
He said at age 73, Comer “obviously has to be thinking about retiring. He has talked about it in the past, we’ve heard speculation about it and it’s not shocking.”
Although Comer has not been actively involved in the day-to-day operations of the company, “he still participates in the activities of its board of directors and he remains active in its guidance and leadership,” Leckow added.
According to Leckow there’s a “big gap” between the price Comer wants for his stock in the company, reported to be between $50 and $70 a share, and what industry analysts see as being worth “somewhere in the mid $40’s,” bringing the purchase price to more than $1.3 billion. Land’s End stock is traded on the New York Stock Exchange.
In a report filed with the federal Securities and Exchange Commission last week, the company, which posted sales of more than $1.3 billion last year, said revenue for the first quarter of this year totaled $311.1 million. That’s up 9% from $285.8 million a year earlier. Net income for the period totaled $5.9 million compared with $292 million the year before.
First-quarter profits for Land’s End–which has more than 10 million customers, a 29-million-name mailing list and mails out some 236 million catalogs–totaled $132 million or 42.4% of total revenue, compared with $120 million, or 41.9% the year before.
Industry analysts, Leckow noted, have “undervalued” Land’s End stock “because of the changes in the company and the transition over the last three years” when a number of key executives left the company.
Leckow was unable to say what effect the sale of Land’s End would have on the catalog industry as a whole. Leckow said it depends on who the buyer is and if it is absorbed into an existing company or “run as a subsidiary.”
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