Sears Agrees To Acquire Lands39 End For 62 Per Share Or 1 9 Billion In Cash

Acquisition Strengthens Sears’ Apparel Offerings; Expands Lands’ End Brand HOFFMAN ESTATES, Ill.
and DODGEVILLE, Wis., May 13 /PRNewswire/ — Sears, Roebuck and Co. (NYSE:S) and Lands’ End, Inc.
(NYSE:LE) have entered into a definitive agreement for Sears to acquire the direct merchant in a
cash tender offer for $62 per Lands’ End share, or approximately $1.9 billion.Upon completion of
the transaction, expected in June, Lands’ End will become a wholly owned subsidiary of Sears and
will continue to be headquartered in Dodgeville. Lands’ End is the largest specialty apparel
catalog company and seller of apparel on the Internet in the U.S.Sears has agreed to commence a
tender offer to acquire all shares of Lands’ End stock. Gary C. Comer, founder and chairman, and
certain other Lands’ End shareholders have agreed to tender their shares, representing
approximately 55 percent of the outstanding common stock. The tender offer requires that at least
two-thirds of the fully diluted shares be tendered. The transaction, which has been approved by
both companies’ board of directors, is contingent upon customary closing conditions, including
regulatory and other standard approvals.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. Sears stores will carry a compelling assortment of Lands’ End men’s, women’s,
and children’s apparel, as well as a selection of footwear, accessories and home fashions.Lands’
End will continue to offer its complete product line direct to customers through its catalogs and
online at The growth prospects of Lands’ End and Sears’ customer-direct businesses,
which consist of online and catalog operations, will be enhanced significantly.Alan J. Lacy,
chairman and chief executive officer, said the opportunity to be the exclusive retail distributor
of Lands’ End merchandise is significant to the Sears’ overall apparel strategy. It further
differentiates Sears as a destination for nationally recognized brands, improves its apparel
offering and accelerates growth of its customer-direct business. Lands’ End and Covington, Sears’
new proprietary classic apparel line launching this fall, will be the foundation of the company’s
proprietary apparel offerings. Including other important national brands, Sears will provide
compelling apparel assortment choices to its customers.”Lands’ End is a very successful and
well-managed company,” Lacy said. “We were drawn to Lands’ End’s brand strength across all apparel
categories, including men’s, women’s and children’s. It is an excellent fit for Sears and our
customers, and will aid us in becoming the preferred shopping destination for families. We can help
accelerate the growth of the Lands’ End direct business through Sears’ extensive customer
relationships.””Today’s transaction allows us to increase the market penetration of the Lands’ End
brand through exclusive retail distribution in approximately 870 Sears stores,” said David F. Dyer,
president and chief executive officer of Lands’ End. “Strategically, we view retail distribution of
our products as an important growth opportunity. 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. Sears is the logical partner for us, considering its
heritage of quality and strong proprietary brands, such as Craftsman and Kenmore. I feel confident
that customers will respond well to another exceptional brand at Sears.”Dyer will continue to lead
the Lands’ End business, reporting to Lacy after the transaction closes. Dyer also will assume
responsibility for Sears’ existing customer-direct business, which includes, catalogs and
specialty merchandise.Lacy said the transaction does not alter Sears outlook for the year. The
transaction is expected to be slightly dilutive to break-even in 2002 and 2003 and significantly
accretive in 2004. “Considering the minimal impact to 2002 earnings, we continue to expect 2002
full year comparable earnings per share, including Lands’ End, to increase approximately 17 percent
from the prior year amount of $4.22,” Lacy said. Sears does not expect to record a special charge
for the Lands’ End transaction.About Our CompaniesLands’ End is a direct merchant of traditionally
styled, classic casual clothing offered to customers around the world through regular mailings of
its monthly and specialty catalogs and via the Internet at In 2001, Lands’ End annual
revenue was approximately $1.6 billionSears, Roebuck and Co. is a broadline retailer with
significant service and credit businesses. In 2001, the company’s annual revenue was more than $41
billion. The company offers its wide range of apparel, home and automotive products and services to
families in the U.S. through Sears stores nationwide, including approximately 870 full-line stores.
Sears also offers a variety of merchandise and services through its Web site,,
Roebuck and Company Cautionary Statement Regarding Forward-Looking InformationCertain statements
made in this news release, including statements under the heading “Sears Reaffirms 2002 Guidance”
and other statements using the terms “expected,” “will,” “plans” and other words of similar
meaning, are “forward-looking statements” based on assumptions about the future, which are subject
to risks and uncertainties, such as competitive conditions in retail; changes in consumer
confidence and spending; interest rates, delinquency and charge-off trends in the credit card
receivables portfolio; the successful execution of and customer reactions to the company’s
strategic initiatives, including the full-line store strategy and the proposed acquisition of
Lands’ End; Sears’ ability to integrate and operate Lands’ End successfully; anticipated cash flow;
general economic conditions and normal business uncertainty. Sears cautions that these statements
are not guarantees of future performance. Actual results may differ materially. In addition, Sears
typically earns a disproportionate share of its operating income in the fourth quarter due to
seasonal buying patterns, which are difficult to forecast with certainty. The company intends the
forward-looking statement in this release to speak only as of the time of this release and does not
undertake to update or revise this projection as more information becomes available.Lands’ End
Cautionary Statement Regarding Forward-Looking InformationStatements in this release that are not
historical, including, without limitation, statements regarding our plans, expectations,
assumptions, and estimations for this transaction or for fiscal 2003 revenues, gross profit margin,
and earnings, as well as anticipated sales trends and future development of our business strategy,
are considered forward-looking and speak only as of today’s date. As such, these statements are
subject to a number of risks and uncertainties. Future results may be materially different from
those expressed or implied by these statements due to a number of factors. Currently, we believe
that the principal factors that could create uncertainty about our future results are the
following: customer response to our merchandise offerings, circulation changes and other
initiatives; the mix of our sales between full price and liquidation merchandise; overall consumer
confidence and general economic conditions, both domestic and foreign; effects of weather on
customer purchasing behavior; effects of shifting patterns of e-commerce versus catalog purchases;
costs associated with printing and mailing catalogs and fulfilling orders; dependence on consumer
seasonal buying patterns; fluctuations in foreign currency exchange rates; and changes that may
have different effects on the various sectors in which we operate (e.g., rather than individual
consumers, the Business Outfitters division, included in the specialty segment, sells to numerous
corporations, and certain of these sales are for their corporate promotional activities). Our
future results could, of course, be affected by other factors as well. Also, this transaction is
not yet completed and is subject to a two-thirds minimum tender condition. More information about
these risks and uncertainties may be found in the company’s 8K and 10K filings with the S.E.C.The
company does not undertake to publicly update or revise its forward- looking statements even if
experience or future changes make it clear that any projected results expressed or implied therein
will not be realized.Additional InformationThis announcement is neither an offer to purchase nor a
solicitation of an offer to sell securities of Lands’ End. At the time the offer is commenced,
Sears will file a tender offer statement with the U.S. Securities and Exchange Commission and
Lands’ End will file a solicitation/recommendation statement with respect to the offer. Investors
and Lands’ End stockholders are strongly advised to read the tender offer statement (including an
offer purchase, letter of transmittal and related tender documents) and the related
solicitation/recommendation statement because they will contain important information. These
documents will be available at no charge at the SEC’s Web site at and may also
be obtained by calling (800) 732-7780 and selecting option three. Copyright 2002 PR Newswire