Under a deal to be completed in June, Lands' End will become a wholly owned subsidiary of Sears and will continue to be headquartered in Dodgeville, Wis.
"Lands' End is a very successful and well-managed company. We were drawn to Lands' End's brand strength across all apparel categories," Alan J. Lacy, Sears chairman and chief executive officer, said in a statement.
Lands' End is the largest specialty apparel catalog company and Internet seller of apparel in the United States.
Sears will introduce a selection of Lands' End products into many of its 870 full-line stores by fall 2002 and is expected to complete product rollout to stores by fall 2003.
Lands' End — with $1.6 billion dollars in revenue in 2001 — will continue to offer its complete product line direct to customers through its catalogs and online.
Sears has agreed to commence a tender offer to acquire all shares of Lands' End stock for $62 a share. Gary C. Comer, Lands' End's founder and chairman, and other shareholders have agreed to tender their shares, representing about 55 percent of the outstanding common stock. The tender offer requires that at least two-thirds of the fully diluted shares be tendered.
Lacy said the transaction — which has approval of both companies' boards of directors — does not alter Sears outlook of a 17 percent earnings increase for the year.