Struggling retailer Sears Holdings is to spin off its Lands' End clothing business, as part of wider efforts to improve the company's financial flexibility.

Sears, which bought Lands' End in 2002 for US$1.9bn, said it intends to distribute all of the outstanding shares of the division's common stock on a pro rata basis to company stockholders.

The spin-off is subject to the approval of the board of directors of Sears Holdings and the satisfaction of certain other conditions, and may be dropped or modified by the company, according to a filing released on Friday (6 December). 

Sears revealed it was considering separating the Lands' End business from the rest of the company in October, while selling some of its Canadian real estate for $383.2m.

The retailer has spun off a number of divisions over the last few years in a bid to turn the business around. Last year, the company spun-off its Hometown and Outlet businesses, as well as a portion of its interest in Sears Canada.

During the third quarter, Sears Holdings recorded higher losses as the transition of the business continued, with sales and margins also suffering.