Sears to buy Lands’ End for $1.9 billion

? Hoping to put some zip in its dowdy line of clothing, Sears is spending $1.9 billion to buy Lands’ End, the highly successful catalog company known for its colorful, long-lasting swimsuits, polo shirts and other casual wear.

Investors and retail experts applauded the move by Sears, better known for selling power tools and car batteries. Lands’ End stock surged more than 20 percent Monday, while Sears rose slightly despite the big price tag.

Kelly Ritchie, Lands' End senior vice president of employee services, left, and Don Hughes, Lands' End chief financial officer, answer questions at a press conference announcing a merger. The company announced Monday that it will merge with Sears, Roebuck & Co. for a reported .9 billion.

“I think both of them will benefit,” said John Champion of the consulting firm Kurt Salmon Associates. “It gives Sears a strong brand in apparel, which has been a challenge for them, and it gives Lands’ End a chance to get retail-store presence.”

Sears, the No. 1 seller in home appliances, has been losing ground to Wal-Mart, Target and others for years in part because of its clothing. Even chairman and chief executive Alan Lacy recently called Sears’ clothing “dowdy” and said he considered abandoning it altogether when he took over the company less than two years ago.

After announcing plans this spring to launch a new Sears clothing line, Lacy decided buying a top independent brand made even more sense.

Lands’ End is the nation’s largest specialty clothing catalog company and the biggest Internet seller of clothing in the United States, ahead of L.L. Bean in both categories. It has 16 outlet stores in four states, and is known for fleece jackets, swimsuits and casual-Friday clothing such as khakis and polos.

Lands’ End will become a wholly owned subsidiary of Illinois-based Sears, though its headquarters will remain in Dodgeville, Wis.

Lands’ End items are expected to be in Sears stores by fall and account for 15 percent to 20 percent of all clothing space by the fall of 2003. Executives said there are no plans to add Sears home appliances to the Lands’ End catalog.

Lands’ End, which had $1.6 billion in revenue last year, will continue to offer its products online and through catalogs. David Dyer, its chief executive and president, will assume responsibility for Sears’ online and specialty catalog businesses.

“We were considering the prospect of opening stores ourselves or seeking a strategic partner, and ultimately decided that our alliance with Sears offered the most exciting opportunity,” Dyer said.

In trading Monday, Sears stock rose 20 cents to $52.01. Lands’ End was up $10.70, or 21 percent, at $61.72.