This is one of the great retail "mergers" in recent history. Sears to Acquire Lands' End in Deal Mon May 13,10:49 AM ET By DAVE CARPENTER, AP Business Writer CHICAGO (AP) - In a bold attempt to revive its long-struggling retail business, Sears, Roebuck and Co. is buying catalog retailer Lands' End Inc. for about $1.9 billion, the companies announced Monday. The announcement sent Lands' End shares up more than 20 percent in early trading while Sears shares slipped, Lands' End is the largest specialty apparel catalog company and the biggest Internet seller of apparel in the United States. Under a deal expected to be completed in June, it will become a wholly owned subsidiary of Sears, continuing to be headquartered in Dodgeville, Wis. "This transaction brings together two of the great names in American retailing, and in the process strengthens both companies and brands," said Alan Lacy, Sears chairman and chief executive. "Needless to say it's a lot of money, but ... strategically it takes us another step on the journey of our turnaround at Sears," Lacy told analysts in a conference call Monday. The move comes with Sears, one of the biggest U.S. retailers, in the midst of an overhaul of its 870 full-line stores after years of lackluster apparel sales. With discount chains such as Kohl's and Target having taken away some of its business in recent years, Sears is easing away from the traditional department-store model and adding more discounting, more self-service and an increased emphasis on home appliances, a longtime strength. It also is adding a Sears-only clothing line under the Covington name this fall. Hoffman Estates, Ill.-based Sears will introduce a selection of Lands' End products into many of its stores by this fall and is expected to complete product rollout to stores by fall 2003. Lacy said Lands' End apparel will complement the Covington brand. Lands' End — with $1.6 billion in revenue in 2001 — will continue to offer its complete product line direct to customers through its catalogs and online at www.landsend.com. Gary C. Comer, Lands' End's founder and chairman, will remain in charge of the business, reporting to Lacy after the transaction closes. He also will assume responsibility for Sears' customer-direct business, which includes sears.com, catalogs and specialty merchandise. Under terms of the deal, Sears will make a tender offer for all shares of Lands' End stock for $62 a share in cash. That is a 21.5 percent premium over Lands' End's closing price of $51.02 a share on Friday in trading on the New York Stock Exchange (news - web sites). In morning trading, Sears shares fell 64 cents to $51.17 and Lands End shares rose $10.70, or 21 percent, to $61.72. Retail analyst Bernard Sosnick of Fahnestock and Co., commenting on the conference call, called Sears' acquisition a "brilliant strategic move." Comer and other shareholders have agreed to tender their shares, representing about 55 percent of the outstanding common stock. The tender offer requires that at least two-thirds of the fully diluted shares be tendered. Forbes magazine, in its latest ranking of the richest people, estimated Comer's wealth in March at $1 billion. Lacy said the transaction — which has approval of both companies' boards of directors — does not alter Sears outlook of a 17 percent earnings increase for the year.