When Lord & Taylor's 38 stores reopen after pandemic-related restrictions ease, they may be running liquidation sales ahead of shuttering permanently. Reuters reported the news on Tuesday, citing unnamed sources.
The department store, now owned by online apparel rental company Le Tote, is delaying a bankruptcy filing in order to make the most of such sales, but has been in touch with liquidators, according to the report. A company spokesperson declined to comment to Retail Dive on the news.
Hudson's Bay Co., which last August sold Lord & Taylor to Le Tote for $100 million, held on to some real estate in that deal and may take advantage of a bankruptcy to reassume some leases, Reuters said.
The COVID-19 pandemic has been rough on consumer-facing businesses, and fragile retailers like Lord & Taylor are especially at risk.
Le Tote, which had hoped to leverage Lord & Taylor locations to expand its apparel rental operations, early last month announced layoffs of most its workers, at both its namesake company and at Lord & Taylor. Before the pandemic interrupted its plans, the acquisition had held some promise for the nearly 200-year-old department store as well, with hopes of attracting new and younger customers.
Even so, many saw the deal as benefiting HBC, and its real estate ambitions, above all. Lord & Taylor, like HBC's investments in Europe, seemed to be viewed as more of an asset to unload — as with the sale last year of its Fifth Avenue Italianate flagship — than a retail turnaround project.
That remains true. In its deal with Le Tote, HBC included a stipulation that HBC and Le Tote as of 2021 will have options to reassess Lord & Taylor's fleet. "This may include HBC recapturing select locations to determine their highest and best use, including possible redevelopment into mixed-use properties with a variety of services, experiences and retail offerings," the companies said at the time.