Edward Lampert and ESL Investments hold a massive stake in Lands’ End, Inc. (NASDAQ:LE) following the completion of the company’s spin-off from Sears Holdings Corp (NASDAQ:SHLD). In a recent filing with the Securities and Exchange Commission, ESL Investments has disclosed the ownership of 15.5 million shares which account for 48.6% of the total number of shares outstanding.
Lands’ End, Inc. (NASDAQ:LE) has a market cap of $814 million and does not pay a dividend. Following the spin-off, the stock fell 15% from the opening price of $32 per share on April 4, 2014. Shares are currently traded at a price of $27.23 apiece and carry a Price to Earnigns (P/E) ratio of 10.xx. Last year, the company registered sales of $1.56 billion, down from $1.59 billion registered in 2012, however net income of $78.8 million is significantly higher than the $49.8 million reported in 2012. Approximately 83% of Lands’ End’s income comes from online and through direct-mail catalogs sales, while 15% come from outlets within Sears shops. The company also operates 16 “inlet” stores outside Sears.
Before the spin-off took effect, Land’s End paid a $500 million dividend to Sears Holdings’ subsidiary, a move financed through a $515 million loan contracted by the company. Additionally, Land’s End has entered an asset based senior secured revolving credit facility, which allows it to borrow up to $175 million with a letter of credit sub-limit.
Lampert and ESL continue to hold Sears Holdings Corp (NASDAQ:SHLD) shares, which is their biggest investment and where Lampert acts as Chairman. Together they hold approximately 51.5 million shares. Lampert has continued reducing its exposure to AutoNation, Inc. (NYSE:AN) through the sale of 1.8 million shares, leaving ESL Investments with approximately 27.4 million shares.