SEARS BUYS LANDS' END FOR $1.9 BILLION

Retailer Also Inks Deal With Martha Stewart for Everyday Line

By Published on .

SAN FRANCISCO (AdAge.com) -- Sears, Roebuck and Co. today took two major steps to firm up its long-sagging softer side: purchasing Lands' End for $1.9 billion and adding the Martha Stewart Everyday line to its Canadian stores.

Lands' End, the biggest specialty catalog retailer in the U.S. whose clothing attracts upscale shoppers, will begin to place merchandise in Sears' stores this fall after the acquisition is complete.

Adding a brand name
Wall Street analysts indicated the deal will help give Sears a brand name for its apparel category comparable to the retailer's Die Hard and Kenmore brands in automotive and appliances, respctively. Other industry watchers said the addition of Lands' End will lead to a face off with J.C. Penney, which currently has one of the largest catalog and online operations and is expected to develop catalogs competitive with Lands' End.

The merger also

Related Stories:
SEARS TO REVAMP STORES, STEP UP MARKETING EFFORTS

SEARS JETTISONS SLOGAN AND CAMPAIGN

MARTHA STEWART COMES OUT IN SUPPORT OF KMART

presents a potential advertising conflict. Omnicom Group's DDB Worldwide, New York and Chicago, currently handles Lands' End, but Sears' agencies are WPP Group's Y&R Advertising and Ogilvy & Mather Worldwide, both Chicago.

Last year, Sears spent $637 million on advertising, while Lands' End spent $19 milion, according to Taylor Nelson Sofres' CMR.

Martha Stewart
In another significant move, Sears said it signed a multiyear deal with Martha Stweart Omnimedia to sell Martha Stewart Everyday label products in Canada in 2003. The agreement covers bed and bath, housewares, gardening, textiles and seasonal product categories, a similar lineup to products currently sold in the U.S. through Kmart.

Ms. Stewart has stepped up her support for Kmart, most recently appearing in a corporate TV spot. She has also urged consumers to go to Kmart in a campaign for her garden furniture line.

Ms. Stewart's contract with Sears will go into effect when her current deal with Canadian retailer Zellers expires next year.

Sears last month announced another cornerstone to its soft-lines brand, the Covington Collection, which includes separates for men, women and children, along with handbags, accessories and shoes for women and men.

In this article:
Most Popular