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Sears Buys Structure Apparel Brand

The retailer plans to develop a men's clothing line under the name, which it bought from Limited Brands.

September 16, 2003|From Bloomberg News

Sears, Roebuck & Co., the largest U.S. department store chain, bought the Structure name from Limited Brands Inc. for less than $10 million to add more well-known clothing lines to attract younger shoppers.

Sears plans to develop a men's clothing line under the Structure brand, said Mindy Meads, Sears executive vice president of apparel. Limited, the nation's No. 2 clothing chain, dropped the name in favor of its Express label.

Structure will be designed for shoppers ages 20 to 35 who are looking for more up-to-date fashions, Meads said.

Last year Hoffman Estates, Ill.-based Sears bought catalog retailer Lands' End to update its clothing selection. Second-quarter clothing sales at stores with Lands' End merchandise were as much as 4% better than at those that didn't sell the brand.

"For a very insignificant amount of money, Sears picks up a fairly well-known brand which they'll immediately be able to apply across all their doors," said Seth Seigel, co-founder of Beanstalk Group, a licensing and merchandising agency and consulting firm that has worked with Sears and Limited.

Sears shares rose 35 cents to $43.87. Shares of Columbus, Ohio-based Limited rose 19 cents to $15.97. Both trade on the New York Stock Exchange.

Last month Sears reported its first same-store sales gain in two years, boosted by home appliances. The company has struggled to bolster sales as customers shopped at lower-price retailers such as Kohl's Corp. and Target Corp. for clothes and Home Depot Inc. for washing machines and refrigerators.

By the end of this year Sears will be completely dependent on its retail operations after selling its credit card division, which accounts for more than half of Sears' profit.

The retailer, which introduced its own Covington clothing last year, is considering licensing and buying other brands, Chief Executive Alan Lacy has said.

The Structure brand will be introduced by the end of next year at Sears stores. The line may be extended to other merchandise.

"We are carefully crafting the appropriate brand to fit all the gaps across apparel," Meads said. "We think this will give us terrific recognition immediately."

Limited decided in 2001 to convert the money-losing Structure chain to Express Men's stores. The last of the stores will be changed this year, spokesman Anthony Hebron said.

Sears bought Lands' End in June 2002 for $1.8 billion. The retailer, which is introducing women's clothing by designer and author Lucy Pereda to attract more Latino shoppers, last week named Carrie Shigetomi as vice president of brand development.

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