In May of 2002, Sears bought Land's End for $1.9 billion in cash, representing a 21% premium over the current share price.
Yesterday, as the snows were hitting Chicago and I became instantly aware of my need for a new winter coat, I took a quick right turn into a local mall and ran into Sears to see what kind of warm jackets they had.
The men's department had a great selection of winter coats, all on sale. (On January 5th, one week into winter, as a winter storm approached. Why were they marked down? See below.) There were many models of great looking Land's End jackets, all at great prices. I was pleasantly surprised with the selection.
I had lots of questions about the Land's End jackets, to make sure I got the lightest weight jacket for my needs. I asked a Sears store clerk for help who said, "They don't train us on any of that."
Luckily, there was an 800 number in the jackets, and I called Land's End on my cellphone. They were really helpful, but I kept getting cut off due to poor cell reception. I asked the same store clerk if I could use her phone to get answers from Land's End so I could buy a jacket and she said, "If it's toll free."
This is a really brilliant idea: Buy a company for a 21% premium so you can get their merchandise in your stores, and then make it a real hassle for your customers to buy that merchandise. And, be sure not to tell your employees how to sell it. How stupid.
At the time of the acquisition Sears CEO Alan Lacy said that the Land's End acquisition "will attract new shoppers ... who will connect with our apparel departments better than they would have in the past." Yes, Alan, this was a great connection.
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