Sears will spin off
its Lands’ End unit
Sears will spin off
its Lands’ End unit
Sears Holdings said Friday that it will spin off its Lands’ End clothing business as a separate company by distributing stock to Sears shareholders.
It’s the latest move by the struggling retailer to turn around its results as it faces wider losses and increasingly displeased investors.
Sears had said in October that it was considering separating the Lands’ End and Sears Auto Center businesses from the rest of the company. It did not mention Sears Auto Center in Friday’s announcement.
Belus Capital Advisors analyst Brian Sozzi said the move shows Sears was unable to get a buyer at the right price for Lands’ End and may raise questions about how much other well-known brand names Sears owns, such as Craftsman, are worth. “It makes you question the value of what Sears is sitting on,” he said.
Edward Lampert, Sears’s chairman and chief executive, disclosed recently that his stake in the company has been reduced to less than 50 percent as investors pulled money out of his hedge fund.
Sears continues to face losses. Last month, it reported a wider third-quarter loss as revenue declined 7 percent, to $8.27 billion. The company heavily marked down goods to move merchandise in the quarter.
Lands’ End, which sells clothing and home goods on the Internet and through catalogues, began in 1963 as a sailboat
hardware- and-equipment catalogue but morphed into a clothing company by 1977. Sears bought the company in 2002.
— Associated Press
Bid to block merger of AMR, US Air fails
A federal judge on Friday rejected a last-ditch effort by consumers and travel agents to stop American Airlines and US Airways from merging next week, a move some fear would drive prices up and service down and make planes more crowded.
The combination of American’s parent AMR Corp. and US Airways Group would create the world’s largest carrier.
Last month, the companies resolved the Justice Department’s antitrust concerns. That settlement requires the airlines to shed some landing slots and gates at several airports, including in New York and Washington. The settlement was approved last week by the bankruptcy judge overseeing AMR’s Chapter 11 case.
AMR has said it hopes to complete the merger Monday.
In their appeal in the U.S. District Court in Manhattan, plaintiffs led by California resident Carolyn Fjord urged that the bankruptcy court’s order be put on hold, saying they would face irreparable harm if the “anti-
competitive” merger went forward.
The consumers and travel agents said combining the carriers could result in fewer flights and available seats, higher fares, poorer service and lower competition, and would be hard to undo once completed.
At a hearing Friday, Chief Judge Loretta Preska of the U.S. District Court in Manhattan said the plaintiffs had failed to show irreparable harm.
Also in Business
A group of 13 defendants who had been charged in a cyber-
attack on PayPal’s Web site pleaded guilty to the December 2010 incident in response to PayPal’s suspension of WikiLeaks accounts. The pleas took place in a California federal court Thursday and were announced Friday by the U.S. attorney’s office in San Francisco. After the release of classified documents by WikiLeaks, PayPal suspended its accounts so the anti-secrecy Web site could no longer receive donations. In retribution, the group Anonymous coordinated and executed denial-of- service attacks against PayPal.
Former Goldman Sachs Group trader Matthew Taylor was sentenced Friday to nine months in prison and ordered pay $118 million in restitution to his former employer after he pleaded guilty to pursuing an unauthorized $8.3 billion futures trade in 2007. U.S. District Judge William Pauley in New York imposed the sentence eight months after Taylor turned himself in to federal authorities and admitted to wire fraud. Prosecutors said Taylor fabricated trades to conceal an $8.3 billion position in Standard & Poor’s 500 E-mini
futures contracts, which bet on the direction that stock index would take.
● Americans increased their borrowing by $18.2 billion in October, to a seasonally adjusted $3.08 trillion, the Federal Reserve reported Friday. The increase was led by a $13.9 billion rise in borrowing for auto loans and student loans. Borrowing in the category that covers credit cards rose by $4.3 billion, the biggest monthly gain since May. That category of borrowing had fallen $218 million in September.
● A federal judge has granted final approval to Bank of America’s record $500 million settlement with investors who claimed they were misled by the bank’s Countrywide unit into buying risky mortgage debt. In a decision made public Friday, U.S. District Judge Mariana Pfaelzer in Los Angeles called the accord fair, reasonable and adequate. She also awarded the investors’ lawyers $85 million in fees and $2.98 million for expenses. Investors, including several public and union pension funds, had accused Countrywide of misleading them in documents about the quality of home loans underlying the securities they bought between 2005 and 2007.
— From news services