Sears Holdings Corporation announced that its board of directors approved the separation of its Lands' End business by means of a pro-rata spin-off transaction.

To effect the spin-off, Sears Holdings will distribute all of the outstanding shares of common stock of Lands' End, Inc. ("Lands' End") on a pro rata basis to holders of Sears Holdings common stock, except that holders of Sears Holdings' restricted stock that is unvested as of the record date will receive cash awards in lieu of shares. These cash awards will be subject to vesting requirements.

Following the spin-off, Lands' End will be a publicly traded company independent from Sears Holdings, and Sears Holdings will not retain any Lands' End common stock.

In connection with the spin-off, Lands' End is pursuing an asset-based senior secured revolving credit facility, which would provide for maximum borrowings of approximately $175 million with a letter of credit sub-limit, and a senior secured term loan facility of approximately $515 million. Sears expects that the proceeds of the Term Loan Facility will be used to pay a $500 million dividend to a subsidiary of Sears Holdings immediately prior to consummation of the spin-off and to pay fees and expenses associated with the foregoing facilities of $15 million.