US retailer Sears Holdings today (29 October) revealed it is considering separating its Lands' End clothing business from the rest of the company.

According to Sears, separating the management of Lands' End would allow the business to pursue its own strategic opportunities, optimise its capital structure, attract talent, and allocate capital in a more focused manner.

"We believe that Lands' End is an iconic brand with the potential to become a more global brand, and we presently anticipate that any separation, if pursued, would not be structured as a sale but rather through a transaction that would allow existing shareholders the opportunity to benefit from the significant potential for value creation over the long term," the company noted. 

The move, Sears said, is part of a wider plan to improve the company's financial flexibility and accelerate its transformation into a leading integrated retailer, including possibly separating its Sears Auto Center business.

The company will also close unprofitable stores, which could include leased locations that are due to expire. It plans to redploy the capital from those stores and focus on its existing Sears and Kmart stores.

Sears Canada, meanwhile, is selling five store leases to Cadillac Fairview Corporation for CAD$400m (US$383.2m) in a deal that is expected to close in the next ten business days.

During the third quarter, Sears Holdings saw comparable store sales fall 3.7% for the 12 weeks to 26 October, with a 4.8% decline at Sears Domestic stores, and a 2.6% for Kmart stores.