Sears, Roebuck & Co agreed to buy Lands' End Inc for US$1.9 billion, gaining a catalog and Internet retailer known for polo shirts, khakis and deck shoes as the largest US department-store chain tries to stem a 15-month decline in clothing sales. \nThe US$62-a-share offer is a 22 percent premium to Lands' End's closing price Friday. Sears will issue about US$1.5 billion in debt to fund the acquisition, Chief Executive Alan Lacy said in an interview. The transaction may reduce profit this year and next, and raise it in 2004, Sears said. \nSears will start selling Lands' End apparel in some of its 870 department stores this fall to capture more upscale shoppers. \nLacy has been remodeling stores and developing private brands in an attempt to persuade customers who shop for appliances and electronics at Sears to give clothing a try, analysts said. \n"Sears has shown no expertise in apparel," said David Abella of Rochdale Investment Management Inc, which holds 92,377 Sears shares in about US$1 billion in assets. Rochdale sold Lands' End this year. "My concern for Sears is that they're paying a lot for it, but you have to pay for a top brand." \nShares of Illinois-based Sears rose US$0.19 to US$52. They have gained 37 percent the past year. Lands' End surged US$10.71, or 21 percent, to US$61.73. \nLands' End also will boost Sears's sales on the Web, where it doesn't sell apparel, and increase its ability to process orders for catalog and Internet customers. The Sears Customer Direct unit generates about US$500 million in sales, Lacy said. \nLands' End Chairman and founder Gary Comer owned about 15.6 million shares as of March and will get more than US$970 million based on the US$62-a-share price. Comer, a weekend sailor, left advertising 40 years ago to start a mail-order nautical-supply business that later added clothing. By last year, Lands' End's sales reached US$1.57 billion. \nSears's long-term debt rating was lowered by Moody's Investors Service after the announcement. Sears's rating was cut one notch to "Baa1" from "A3" because of the increased operational risk the company is undertaking with the purchase, Moody's said in a statement. Moody's couldn't immediately be reached for comment. \nLacy's expansion on line comes as one of Sears's biggest rivals, Federated Department Stores Inc, pulls back. Federated has stopped mailing Fingerhut catalogs and has fired about half of the unit's 6,000 employees as it closes the division. Federated struggled to stem losses at Fingerhut, which served a lower-income customer than those at the company's Macy's and other department stores, analysts said. \n"Federated took on more than they bargained for" when they bought Fingerhut, Abella said. "If they had bought Lands' End and put it in their stores, maybe they'd have done well." \nSears's purchase of Lands' End also comes almost a decade after Lacy's predecessor Arthur Martinez eliminated the company's Big Book catalog, and fired thousands of workers, to slash costs. \nThe telephone-size catalog offered the full range of products that were available at Sears stores, Sears spokeswoman Peggy Palter said. \n"It was very expensive to offer everything to everyone," she said. Specialized catalogs work better because they can be sent to a smaller group of customers with an interest in those products, she said. \nAs much as 20 percent of the space Sears devotes to clothing in its stores will be Lands' End products, the company said. \nApparel currently generates about US$6 billion, or 15 percent of annual sales at Sears, whose other brands include Canyon River Blues and Apostrophe. \n"What we've really lacked is a powerhouse brand in softlines that really stands up to the same kind of brand that we have in the hardlines side," Lacy said. \nDavid Dyer, Lands' End's president and chief executive, will continue to lead the Dodgeville, Wisconsin-based retailer as a Sears subsidiary.
‘NO EQUILIBRIUM’: Taiwan’s increased defense spending is a good step, but it needs to do more to have the ability to deter aggression from China, a senior US official said The US plans to sell as many as seven major weapons systems — including mines, cruise missiles and drones — to Taiwan, four people familiar with the discussions said. Pursuing seven sales at once is a rare departure from years of precedent in which US military sales to Taiwan were spaced out and carefully calibrated to minimize tensions with Beijing. However, US President Donald Trump’s administration has this year become more aggressive with China, and the sales would land as relations between Beijing and Washington are at their lowest point in decades over accusations of spying, lingering trade tensions, disputes about the
CLOSE ENCOUNTERS: Several of the PLA fighter jets that crossed the median line of the Strait came within 68km of Hsinchu, drawing warnings from Taiwan, the ministry said At least 18 Chinese military aircraft yesterday flew into the nation’s air defense identification zone (ADIZ) on the second day of a US delegation’s visit, the Ministry of National Defense said, adding that the military responded by deploying an air defense missile system to monitor their activities. A delegation led by US Undersecretary of State for Economic Growth, Energy and the Environment Keith Krach on Thursday started a three-day visit to Taiwan. The ministry from Thursday started publicizing the actions of the Chinese People’s Liberation Army (PLA) in Taiwan’s ADIZ on its Web site and Twitter. According to ministry reports, 18 PLA aircraft
TWO CASES: The five allegedly conspired with conglomerates, threatening the nation’s governance and subverting the rules of ethical conduct, a deputy chief prosecutor said Taipei prosecutors yesterday charged three legislators and one former lawmaker with contravening the Anti-Corruption Act (貪污治罪條例) in a case linked to former Pacific Distribution Investment Co (太平洋流通) chairman Lee Heng-lung’s (李恆隆) battle with the Far Eastern Group (遠東集團) over ownership of the Pacific SOGO Department Store (太平洋崇光百貨) chain, while independent Legislator Chao Cheng-yu (趙正宇) was indicted in a separate case involving two funeral services companies and a plot of land in a national park. Chinese Nationalist Party (KMT) legislators Chen Chao-ming (陳超明) and Sufin Siluko (廖國棟), Democratic Progressive Party (DPP) Legislator Su Chen-ching (蘇震清) and former New Power Party legislator
Swedish Member of Parliament Hampus Hagman is pushing for changing the name of the nation’s trade office in Taipei to signal improved relations with “Asia’s perhaps foremost democracy.” Hagman on Wednesday last week proposed renaming the Swedish Trade and Invest Council to “Sweden’s Office in Taipei,” following similar changes by other nations. The Swedish Trade and Invest Council, part of Business Sweden, is owned by the Swedish government and Swedish industry. Taiwan and Sweden share important values such as respect for democracy, human rights, the rule of law and freedom of speech, Hagman said in the motion, adding that the two nations