Sears (SHLD) and Lands’ End are splitting ways in a deal that will help reduce Sears’ debt.
The retailer filed an amendment with the Securities and Exchange Commission on Tuesday to spin off its Lands’ End business. The deal will see Lands’ End pay Sears a cash dividend of $500 million before the spinoff, financed by a new term loan.
Lands’ End might also have to borrow up to $175 million for working capital. On the other hand, Sears will be able to reduce its debt as the retailer has been struggling lately.
SHLD stock is down about 1.6% Thursday.